Bitcoin Trading Update for May 28th, 2019 (BTC/USD)

Market Commentary

Following a Memorial Day weekend that saw the bitcoin price breakout to new regional highs well above 8390 $, there is a bit of sell pressure creeping into the market now as liquidity returns which has shaven a few hundred dollars off of the price over the past 36 hours. While it currently does not look like this is the beginning of something more sinister in terms of a larger correction, we would not be surprised to see price consolidate in choppy fashion over the coming days which means we might have to stay patient with the now active ProTrade.  

6-Hour Chart

We'll begin this last week of May with a look at the 6-hour chart where we can see that the ascending triangle that we discussed last week indeed foretold a breakout which materialized on Saturday on a large [members-only content] signal and bullish candle formation that reconfirmed bullish market structure, and despite the recent weakness we are still getting [members-only content] signals as price finds support at the still rising EMA's so it looks like this is simply a breather for the bulls. Also note that all of the SMA's continue to trend higher and the Ichimoku Cloud continues to grow more bullish out in front of the market, both supportive of the consolidation scenario, although there are no longer any [members-only content] actively building below the market and short-term support is relatively thin down to the [members-only content] $ region so there might be a slight bearish bias over the next few days. 

Moving on to momentum and volume, notice that Willy is looking heavy following a tag of overbought territory, RSI is showing a small bearish divergence, the Stochastic has started to move lower, MACD is heading back towards its zero line, and PPO is still flashing weak sell signals, all pointing to the need for a pause but also [members-only content] for now. The very thin volume profile setup below the market is supportive of this view, although exchange volumes continue to favor the bulls overall and the A/D line is staying strong for the time being so we think dip buyers will emerge in the not too distant future. 

3-Day Chart

We'll also take a look at the 3-day chart for a broad view of the medium-term technicals where we can see that price is currently in a bit of a resistance vacuum on [members-only content] signals and generally bullish candle formations while market structure remains firmly intact, all good news for the bulls moving forward, as are the moving averages all of which continue to rise and the multiple levels of dynamic support that are still actively building below the market ([members-only content]). Also note the multiple demand areas and the still slightly bullish Ichimoku Cloud, also good for the bulls, however heavy resistance around and above the [members-only content] $ level will make it difficult for the bulls to muster another breakout without more of a recharge first so we're making some small adjustments to the ProTrade in case things turn south. 

As far as momentum and volume are concerned, notice that RSI is very close to joining Willy and the Stochastic in officially overbought territory while PPO begins to flash strong sell signals, all suggesting that a pause or pullback is necessary, although MACD still looks decent and overbought conditions have been a good sign lately so unless the [members-only content] $ area is broken we're not all that worried from a medium-term perspective. The very bullish exchange volumes and the accelerating A/D line also suggest that the bulls are still in control overall, although the suboptimal volume profile setup remains a worry long-term and will come into play at some point moving forward. 

Market Summary

With price now moving down into the low-8600's $ it looks like the bears are gaining some near-term confidence as it becomes clear that the bulls are in need of some rest, although said bulls are already playing some defense which tells us that indeed the general bias is still to the upside despite what could be a more substantial pullback over the course of this week. As previously mentioned, as long as the near-term demand area in the [members-only content] $ region remains intact then we think this dip will be bought and will eventually set the stage for the final leg up into the [members-only content]'s $ where we'll get neutral once again.