No surprises in the bitcoin markets over the past 24 hours considering price was able to stay above the new 6208 $ local lows which has kept the new 6200 - 6350 $ trading range intact as expected, although the bias has certainly still been to the downside overall as spikes lower remain common for the time being. While we do think that more volatility is likely towards the end of the week, it appears as though the market wants to continue to move sideways over the next few days given the monthly close is tomorrow evening, also Halloween in the US, which will certainly pull some volume and liquidity away from the market over the next 24 - 48 hours. For this reason, we are [member's-only content] in order to properly manage risk given the near-term technicals remain fairly bearish.
We'll begin with a look at the 4-hour chart for a more granular view of the short-term setup where we can see that price continues to consolidate inside of the [member's-only content] zone on mainly [member's-only content] signals and mixed candle formations while market structure remains uncertain, all suggesting more choppy range-bound action within what very well could be yet another symmetrical triangle pattern. Also note that we could be looking at a bearish pennant forming right now, the EMA's are stacking to the downside, the 50 SMA just crossed below the 100, the 200 SMA remains in a slow and steady downtrend, strong dynamic resistance continues to build at multiple levels overhead, and the Ichimoku Cloud is quite bearish already after twisting to the downside a few days ago, all confirming the still intact downward bias. Having said that, the support confluence consisting of the upper demand area, the [member's-only content] zone, and the triangle uptrend line is doing a good job of keeping price above recent lows which is increasing the odds of a bounce back to the upside to test the [member's-only content] $ region in the not too distant future.
As far as momentum and volume are concerned, notice that Willy and the Stochastic are getting very close to entering officially oversold territory, RSI is already moving higher following the first full recharge in well over two weeks, MACD appears to have bottomed and is moving back towards its zeroline, PPO has started flashing strong buy signals for the first time since the last legitimate pullback a few weeks ago, and honestly the current setup looks like a fractal of that previous selloff which ended up being a short-term buying opportunity within the consolidation area, all encouraging signs moving forward. Additionally, despite the fact that exchange volumes are still slightly bearish, the A/D line has started to pick up some steam to the upside while the volume profile notch between [member's-only content] $ finally starts to get filled in which is good for the bulls over the short-term. Overall we expect more sideways movement over the next few days before some volatility returns as we start the new month, although the technicals are still suggesting that [member's-only content] holds for at least another week or two so we're still not anxious to do much before a true resolution materializes.
We'll zoom out to the 3-day chart today for a broader view of the medium-term setup where we can see that price is moving lower off of the still intact descending/symmetrical triangle downtrend line which has sparked a [member's-only content] signal and bearish candle formation as we head into the close later today, none of which bodes well for the bulls. Also note that the recent weakness has pushed price back below the still slightly bullish 200 SMA and is keeping the shorter term moving averages moving to the downside while dynamic resistance continues to build overhead around [member's-only content] $, not to mention the still very bearish Ichimoku Cloud out in front of the market, all suggesting that the bears are still marginally in control moving forward. We say marginally, however, given that price is moving back down into the upper demand area which has been supportive of the bulls since the February spike lows, so until the descending triangle is confirmed via a breakdown below [member's-only content] we will assume that the [member's-only content] region will hold once again.
Moving on to momentum and volume, notice that Willy is still moving slowly to the downside but is very close to fully recharged now, RSI is accelerating to the downside with some room to run before being oversold, the Stochastic has rolled back over and is heading to the downside once again, MACD remains flatlined at its zeroline, and PPO continues to flash firmly neutral signals, all pointing to more consolidation inside the triangle formation(s) but with a slight bearish bias over the near-term. Conversely, the volume indications remain encouraging considering the A/D line remains healthy and elevated and the volume profile setup is still attractive around current levels, both of which should continue to help the bulls play defense moving forward, although weak exchange volumes and a notch around [member's-only content] $ are still worrisome items to keep an eye on over the coming weeks if things do take a turn for the worse.
As previously mentioned, we think the market will be in a holding pattern over the next 24 - 48 hours due to neutral technicals and low liquidity seasonality which means movement outside of the [member's-only content] $ area is unlikely in our opinion. Having said that, we do think that some legitimate volatility is possible near the end of the week into next, and for the time being we think the risk of downside vol is greater than upside considering the current state of the charts which is why we have adjusted the still active PT. If the bulls can continue to defend the 6k $ region, though, while the technicals recharge and sync up once again, then we very well could see some fireworks to the upside over the month of November. Regardless, there is not much we can do over the near-term so we'll simply continue to babysit the still active VST ProTrade until further notice.