The bitcoin markets have remained under pressure over the past 24 hours as expected which has sparked multiple spikes well below 6300 $, one of which led to a new local low of 6244 $ where buyers began to re-emerge. While it is encouraging to see the bulls continue to defend the 6200 $ area, which is where previous regional lows reside as well as the bottom of the current short-term trading range, the technicals are starting to turn more bearish on the longer timeframes which is certainly concerning seeing as though there is still over a week left until potentially positive seasonality begins to kick-in. This is why the bulls must stay on top of their defensive game if they want to prevent a selloff down to or below [members-only content] $, which is becoming increasingly likely according to the charts (which we will get to now).
We'll zoom into the 4-hour chart today for a more granular view of the short-term setup where we can see that price has broken convincingly below the now-voided ascending triangle formation which has led to a series of [members-only content] SCMR signals and turned market structure heavy for the time being, although there have been a few [members-only content] signals sprinkled into the current consolidation which shows that the bulls are still somewhat active at these levels as well. Also note that the upper demand area has now acted as support a few times over the past 24 hours and candle formations have been relatively bullish, both of which suggest that the bulls can continue to play defense, although all of the moving averages are accelerating to the downside, dynamic resistance is actively building overhead once again, and the Ichimoku Cloud has twisted back to bearish out in front of the market, so the bears appear to still be in control for the time being.
Moving on to momentum and volume, notice that Willy and the Stochastic are still slowly recharging to the downside but are close to oversold territory, RSI failed to fully recharge but is starting to move higher nonetheless, MACD is showing a large bullish divergence, and PPO continues to flash buy signals, all of which is [members-only content] over the near-term. Having said that, exchange volumes are currently firmly bearish, the A/D line has taken a hit recently and remains under pressure, and the volume profile setup is still very thin between [members-only content], which is why we think there could easily be at least one more spike lower before a decent countertrend bounce materializes.
Next up is the 3-day chart where we'll take a look at the bearish developments that we mentioned earlier such as the [members-only content] on a [members-only content] signal and small but bearish candle formation that is shifting market structure back to bearish over the short-term. We can also see that price is still below the slightly bearish EMA's, which continue to act as overhead resistance, the 50 SMA is in the process of crossing below the 200 SMA (death cross), and the Ichimoku Cloud continues to expand to the downside out in front of the market, none of which bodes well for the bulls moving forward. Granted, the upper demand area is still acting as a barrier to lower prices while the aforementioned 200 SMA continues to rise despite being above the market, although we think these things will only help the bulls to play defense rather than [members-only content] moving forward.
As far as momentum and volume are concerned, notice that RSI and the Stochastic continue to tread water in no man's land, Willy is still flatlining just above oversold territory, MACD remains just below its zeroline, and PPO is still firmly neutral, all suggesting that we're likely to see more [members-only content] over the coming days and weeks but with a slight [members-only content] bias overall. The volume indications are confirming this outlook considering exchange volume remain mixed and anemic, the A/D line has completely stagnated (albeit at elevated levels), and the volume profile setup remains healthy but looks thinner around [members-only content] $ than anywhere else below 10k $, so we would not be surprised to see a test of that level or lower before a true rally above 6800 $ can materialize (which is what is needed to kick-off a holiday bull run).
Missed opportunities on the part of the bulls over the past few weeks could come back to haunt then over the near-term considering it is looking more and more likely that a test of lower levels is in the cards given the current state of the short to medium term technicals. While a move down to [members-only content] $, or possibly even lower, might sound scary compared to what we have gotten used to recently with this stagnant price action, we think a final washout to spark some legitimate bullish divergences very well could be the spring we need to jump the creek, which is why we have adjusted the ST ProTrade to account for more potential downside. That said, it's also quite possible that price simply continues to consolidate above [members-only content] $ before the bulls get impatient again, so we'll also continue to try to hunt VST longs in favorable r/r areas just below the market.