Oct 18, 2017 --- Free Reports
The market didn't take long to resolve out of the 5400 - 5800 $ trading range which we emphasized yesterday, and as expected the move ended up being to the downside. Earlier this morning we saw a low of 5101 $ before the current countertrend bounce which has taken price back above 5200 $. So far all of this is inline with our forecast short, medium, and long term forecasts, and is playing out as it should from a technical perspective. Speaking of the technicals, we think that this selloff has been catalyzed strictly by the charts and not something more worrying from a fundamental perspective, another reason we hope to buy the market at slightly lower prices. In fact, as far as price action goes this is the healthiest thing for the market going into what is likely another bullish phase over the next few weeks, as long as the 4500 $ area holds of course. Overall, the signs are pointing to this still being a buyable dip, so let's get to the charts to see where we should strike.
Back to the 6-hour chart today to see what kind of near term damage has been done over the past 24 hours. Notice that SCMR turned red following the confirmation of the market structure double top on the break of 5400 $ overnight, and we are still getting mostly bearish signals for the time being. Also note that the EMA's are about to cross over to the downside, new dynamic resistance is building near the highs, and there still isn't much support around current levels. On the other hand, price is bouncing off of the still bullish 50 SMA on a nice looking candle formation, strong dynamic support continues to build around 4500 $, and the OTE long zone and upper demand area should both entice some buyers if price continues slightly lower (which we think is a good possibility).
Moving on to momentum and volume, we can see that Willy, RSI, and the Stochastic are all quickly moving down to oversold territory while PPO shifts back to neutral, all of which is encouraging in terms of a recharge over the near term. That said, the volume indications have taken a turn for the worse recently, especially the A/D line, which is one of the main reasons why we think there could be more downside over the coming days prior to a stablization/consolidation around the psychologically significant 5000 $ level (again, which we would be buyers of).
We return to the trusty daily chart today for a more granular look at the medium term setup, and we can see that the selloff overnight has yet to turn SCMR bearish, granted it is back to neutral, although the rolling top in the lower Fibonacci extension area is not a great sign over the near term. Conversely, all of the moving averages remain bullish, even the EMA's, dynamic support continues to build at multiple levels, and the Ichimoku Cloud remains bullish out in front of the market, all of which is encouraging from a longer term perspective. As of now, the technicals seem to be pointing to a continuation of the short term weakness prior to another run to the upside to test or break ATH's over the medium term.
As far as momentum and volume are concerned, Willy and the Stochastic are still in officially overbought territory but are starting to roll over, MACD is accelerating lower back towards its zeroline, and PPO has just begun to flash strong sell signals which is worrying for the time being. In terms of volume, the medium term indications are still firmly bullish with the A/D line barely taking a hit over the course of this week, and exchange volumes haven't been at all impressive recently, both of which are signaling that the bulls are still in control of the market overall despite the price action over the pat few days. By all accounts, we should still be in BTFD-mode as price likely pushes lower in price before a bullish reversal
All things considered we have no complaints regarding how things are materializing in the market this week, especially since we have been hoping for a test of the 4800 - 5000 $ area prior to another move up given we think this is the most healthy path for price in terms of sustainability over the medium to long term. Generally speaking, as long as the market can continue to pullback and consolidate following breakout rallies to the upside the market should remain in relative balance which should help to prevent parabolic spikes higher and thus preserve the state of the bull market (one of the main reasons we still want to buy dips rather than sell rips).
**Premium members see live trades, complete forecasts, and full charts everyday.
To get your access to our edge: subscribe today.**
Posted ProTrade Ideas:
1.) **Bitcoin ProTrade - Very Short Term [UPDATED on 10/18/2017]**: We will stay [members-only text] off of the [members-only text] level with a stop around [members-only text] and a target of [members-only text].
2a.) **Bitcoin ProTrade - Long Term [UPDATED on 10/18/2017]**: We will consider a [members-only text] off of the [members-only text] level with a stop around [members-only text] and a target of [members-only text].
2b.) **Bitcoin ProTrade - Long Term [UPDATED on 10/13/2017]**: We will consider a [members-only text] off of the [members-only text] level with a stop around [members-only text] and a target of [members-only text.
3.) **Bitcoin ProTrade - Medium Term [UPDATED on 10/13/2017]**: We will consider a [members-only text] on a move to the [members-only text] area with a stop around [members-only text] and a target of [members-only text].
4a.) **Bitcoin ProTrade - Long Term [UPDATED on 10/13/2017]**: We will consider a [members-only text] off of the [members-only text] level with a stop around [members-only text] and a target of [members-only text].
4b.) **Bitcoin ProTrade - Long Term [UPDATED on 10/13/2017]**: We will consider a [members-only text] off of the [members-only text] level with a stop around [members-only text] and a target of [members-only text.
Disclaimer: Please always do your own due diligence, and consult your financial advisor. Author owns and trades bitcoins and other financial markets mentioned in this communication. We never provide actual trading recommendations. Trading remains at your own risk. Never invest unless you can afford to lose your entire investment. Please read our full terms of service and disclaimer at the BullBear Analytics Legal.