Bitcoin Price Report for May 5, 2017

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Market Commentary:

While the unrelenting rally we saw over the first half of this week stalled out yesterday following a new ATH of 1623 $, then subsequently proceeded to quickly and briefly plunge close to 200 $ lower prior to bounce from 1444.96 $, all in all we cannot complain about the price action given it has begun to reset the very extended momentum oscillators that we have been mentioning for awhile. Since the dip, however, the market has bounced back strongly into the mid-1500's $, although it looks to us like the bulls want to try to [members-only text] again already.  Seeing as though we now have some new near term support levels to shoot against, in addition to still intact market structure and bullish price action, we think the bias remains with the bulls for the time being.  

Having said that, we cannot rule out a sideways consolidation within the newly established [members-only text] trading range throughout the weekend as indicators continue to recharge and price tries to form a bullish pennant, however if Marine Le Pen wins the French election then all bets are off and we likely headed significantly higher.  Should be an interesting next few days to say the least.


6-Hour Chart:

To wrap up this first week of May we return to the 6-hour chart for a look at the shorter term technical setup going into a politically uncertain weekend.  Notice that the spike lower yesterday following the new ATH precipitated a [members-only text] SCMR [members-only text] bar, normally a worrying sign, however we are already back to [members-only text] now and new dynamic support has formed at [members-only text] (which are also in the new [members-only text] area).  We can also see that price appears to be forming a bullish pennant formation as it consolidates gains off of the new ATH, while the EMA's and SMA's all continue to stack to the upside as does the Ichimoku Cloud.  Given these indications alone, we have a hard time believing that the rally is over.

For more clarity on whether or not a top is in, we turn to momentum and volume.  From a momentum perspective things are still a bit stretched considering Willy and the Stochastic are just now coming down out of officially overbought territory, MACD is approaching the zeroline, and PPO is still flashing strong sell signals.  On the other hand we have RSI pulling back nicely, the A/D line continuing to accelerate higher, and price action staying bullish, none of which supports a [members-only text] yet at these levels.  Given these conditions, we think a relatively brief continuation of the sideways consolidation is likely prior to visiting [members-only text] which we discuss below.

Daily Chart:

Back to the daily chart for a final look at the medium term setup for this week.  The Fibonacci extension area continues to be our main area of focus in terms of resistance, although on this timeframe the selloff from the spike above the [members-only text] level is barely noticeable.  That said, this should still be an area of interest going forward until we get through it which would take a breakout above [members-only text] on volume in the not too distant future.  Conversely, market structure is still bullish, SCMR continues to paint bright green candles, there is no historical resistance, and volumes remain very supportive of the bull market.

As far as momentum is concerned, Willy and RSI are still pinned in officially overbought territory and PPO is still flashing strong sell signals, however the Stochastic is finally heading lower and all relevant moving averages continue to trend higher in support of the rally.  No doubt that we are getting to a point in which an [members-only text] could come at any time, however barring some unforeseen exogenous event over the next few days we think it will be difficult for bears to get any traction until price gets up into the [members-only text] region.

Market Summary:

While it is obvious that we remain firmly in the [members-only text] going into this first weekend of May, as price extends further and further to the upside attractive and executable ProTrade setups become more and more difficult to find.  The aggressive nature of the recent gains has meant that retracements into favorable confluence areas have been practically nonexistent which is why we have been issuing and taking [members-only text] plays instead.  

Despite the fact that we are puling from that same playbook today, and over the weekend, we want to issue a word of caution that nothing lasts forever so at some point we need to be ready for one of these setups to [members-only text] once a top is actually reached.  That said, we see little evidence of this yet so we will continue to [members-only text].

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Posted ProTrade Ideas:

1a.) **Bitcoin ProTrade - Very Short Term [UPDATED on 5/5/2017]**:  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].

1b.) **Bitcoin ProTrade - Very Short Term [NEW; ISSUED on 5/5/2017]**:  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].

2a.) **Bitcoin ProTrade - Short Term [UPDATED on 5/5/2017]**:  We will consider a [members-only text] position in the [members-only text] area with a stop around [members-only text] and a target of [members-only text].

3.) **Bitcoin ProTrade - Medium Term [UPDATED on 5/5/2017]**:  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].

4.) **Bitcoin ProTrade - Long Term [UPDATED on 5/2/2017]**:  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].

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