Bitcoin Trading Update for May 14th, 2019 (BTC/USD)

Market Commentary

The bitcoin markets are looking a bit heavier this morning from a technical perspective following new regional highs above 8000 $ over the past 24 hours, as expected, although price action remains favorable in terms of the dips still being bought so we're not yet ready to call a top at this time. That said, Consensus is nearing its end so hype surrounding that event will wane soon, and we are entering a period of seasonality that tends to be rather unfavorable toward risk assets in the financial markets ("sell in May, go away"), so we think at least being somewhat cautious is wise at these levels.

6-Hour Chart

We'll zoom out slightly to the 6-hour chart today to see what the recent price action has done to the shorter-term technicals and notice that the recent high of 8335 $ came on [members-only content]above 8000 $ while support remains practically nonexistent down to the [members-only content]'s $, all of which could magnify the selling pressure over the coming days. That said, SCMR continues to print [members-only content] signals, market structure remains firmly intact, all of the moving averages continue to rise, strong dynamic support is still actively building below the market, and the Ichimoku Cloud continues to expand to the upside, all suggesting that the medium-term rally is not yet over. 

Moving on to momentum and volume, it comes as no surprise that Willy, RSI, and the Stochastic are once again pinned in overbought territory as has been the case for most of the month of May, and have been a boon to price, although a bearishly divergent MACD and a PPO that has been flashing strong sell signals for awhile tell us that [members-only content] is needed before another legitimate leg higher. The very thin and porous volume profile setup is pointing to this near-term outcome as well, although the strong A/D line and still encouraging exchange volumes are keeping us [members-only content] for the time being. 

Daily Chart

Next we want to take another look at the daily chart given there have been some interesting developments over the past 24 hours such as the bearish candle formation that is forming inside of a longer-term supply area, a candle that at points today has been a textbook shooting star, which is a bit worrying moving forward, although SCMR is [members-only content] while [members-only content] so the technicals are still saying that the longer-term bias is to the upside. Also note that all of the moving averages are now moving higher, all of the shorter-term MA's are now above the 200 SMA, and the Ichimoku Cloud continues to rocket to the upside, all supportive of higher prices in the not too distant future, however, given the need for a breather we would not be surprised to see price consolidate between [members-only content] for at least a few days. 

As far as momentum and volume are concerned, notice that Willy, RSI, and the Stochastic are all still treading water in the officially overbought territory while PPO flashes strong sell signals and MACD begins to look a bit toppy, so some sideways to slightly bearish action over the near-term would certainly help the unfavorable momentum conditions. Having said that, exchange volumes and the A/D line continue to suggest that the bulls are not yet done showing their strength despite a terrible volume profile setup so our bias will stay to the upside until we see more evidence of a top. 

Market Summary

While the technicals are telegraphing the need for a pause in the action in order to consolidate the recent gains and lay a foundation for an attempt at the [members-only content] $ region, price action continues to show the strength of the bulls so its hard to say whether or not the market is truly ready for a break. Perhaps a few more probes of the [members-only content]'s $ are in the cards over these last few days of Consensus before a more legitimate retracement and subsequent consolidation materializes, a consolidation that [members-only content].