Good morning, traders. Bitcoin was printing a great daily candle yesterday until near the end of the day when price fell. This left a large upper wick and small body near the lower third of the candle. Indecisive, but looking a lot like August's low playing out. We will see if we get a lot of follow-through similar to that period with candles having large upper and/or lower wicks and small bodies. That could mean another period of extensive sideways movement. Watching price movement on Tensorcharts.com shows sell walls continually appearing around $6300 with buy walls catching the bounce as price ricochets off them and heads downward. It appears that someone may be filling their orders in this area. As I mentioned months ago when the news of GS-backed Circle buying Poloniex came out, the rest of the big boys would be doing everything they can to compete. The most recent possible attempt at doing so is Citigroup's attempt at creating an ADR to allow trading of Bitcoin rather than the avenue most are taking which is based on NDF. This could allow the company to catapult ahead of the others and is very bullish for Bitcoin. (bitcoinexchangeguide...in-security-product/)
Throughout the pops and drops this weekend, Bitcoin has created a decent-sized descending broadening wedge (DBW), similar to those seen in June and August which makes me think we may not spend too long moving sideways as we are already a good ways through it. Currently, that would give price a target of $6850 upon breach of the descending upper resistance line. Traders should be cautious, however, as the possible bearish pennant building could potentially have price first targeting the bottom of the DBW at around $6050 upon breach of the ascending lower support line of the pennant. However, we can extend the upper line as shown and create an ugly bull pennant as well, which would provide a target of around $6660, near the equilibrium of the blue box. We can also see that blue box is at the equilibrium of the larger yellow box. I expect resistance in the yellow box, most notably at the blue box, and a breach through the top of the yellow box should set up price for a possible pop upward. I'm not confident about the pennant being anything significant due to the white space and small-bodied, long-wicked candles that permeate the possible pattern so I am much more interested in how the DBW plays out.
The 4H chart shows OBV rising since September 6th, even though price has been dropping. Volume precedes price, so we should expect a decent rise in price sooner rather than later. RSI and MACD are both rising as well at this time. The 1D chart shows price printing an ascending channel. Many point to this as a bear flag, however price retraced almost 61.8% of the way to the top of the flagpole which generally nullifies it as such. Additionally, price would need to touch the top of the ascending channel once more to print four alternating top and bottom touches thereby confirming the channel/flag. This means we would need to see price reaching $7500 before it drops through the bottom.
If price fails to hold its current low around $6100, then I am watching for the June low of $5775, then $5450, and $5250 to provide support. Continual drop through these levels sets up possible support at $4600-$4900. Weekly has printed a higher low and needs to breach $8500 to give us a higher high. Doing so would be bullish on a larger TF. Shorts unwound a bit during the weekend but started building again yesterday. I don't believe this will continue as I think the entity that stacked shorts at the end of the week is attempting to lessen their footprint now that retail shorts have jumped on board. As mentioned previously, it could be an attempt to generate liquidity via a short squeeze which would push price through the resistance in the mid-$7000s. Longs have also started increasing. Retail sentiment continues to become bearishly deeper. CME BTC futures has a gap up to $6400 that needs to be filled and is currently printing a possible 1D bullish hammer reversal candle. DJI is printing a 6H DBW and has a gap unfilled around $450 above its current price. VIX is dropping today as is the DXY. The latter needs to see a breach of the swing low at $94.43 to suggest further downward movement. Historically, a dropping DXY coincides with a rising BTC.
Unfortunately, I came down ill at the end of last week and have lost my voice as a result so I will not be able to live stream today. I am hoping to be back tomorrow.
Throughout the pops and drops this weekend, Bitcoin has created a decent-sized descending broadening wedge (DBW), similar to those seen in June and August which makes me think we may not spend too long moving sideways as we are already a good ways through it. Currently, that would give price a target of $6850 upon breach of the descending upper resistance line. Traders should be cautious, however, as the possible bearish pennant building could potentially have price first targeting the bottom of the DBW at around $6050 upon breach of the ascending lower support line of the pennant. However, we can extend the upper line as shown and create an ugly bull pennant as well, which would provide a target of around $6660, near the equilibrium of the blue box. We can also see that blue box is at the equilibrium of the larger yellow box. I expect resistance in the yellow box, most notably at the blue box, and a breach through the top of the yellow box should set up price for a possible pop upward. I'm not confident about the pennant being anything significant due to the white space and small-bodied, long-wicked candles that permeate the possible pattern so I am much more interested in how the DBW plays out.
The 4H chart shows OBV rising since September 6th, even though price has been dropping. Volume precedes price, so we should expect a decent rise in price sooner rather than later. RSI and MACD are both rising as well at this time. The 1D chart shows price printing an ascending channel. Many point to this as a bear flag, however price retraced almost 61.8% of the way to the top of the flagpole which generally nullifies it as such. Additionally, price would need to touch the top of the ascending channel once more to print four alternating top and bottom touches thereby confirming the channel/flag. This means we would need to see price reaching $7500 before it drops through the bottom.
If price fails to hold its current low around $6100, then I am watching for the June low of $5775, then $5450, and $5250 to provide support. Continual drop through these levels sets up possible support at $4600-$4900. Weekly has printed a higher low and needs to breach $8500 to give us a higher high. Doing so would be bullish on a larger TF. Shorts unwound a bit during the weekend but started building again yesterday. I don't believe this will continue as I think the entity that stacked shorts at the end of the week is attempting to lessen their footprint now that retail shorts have jumped on board. As mentioned previously, it could be an attempt to generate liquidity via a short squeeze which would push price through the resistance in the mid-$7000s. Longs have also started increasing. Retail sentiment continues to become bearishly deeper. CME BTC futures has a gap up to $6400 that needs to be filled and is currently printing a possible 1D bullish hammer reversal candle. DJI is printing a 6H DBW and has a gap unfilled around $450 above its current price. VIX is dropping today as is the DXY. The latter needs to see a breach of the swing low at $94.43 to suggest further downward movement. Historically, a dropping DXY coincides with a rising BTC.
Unfortunately, I came down ill at the end of last week and have lost my voice as a result so I will not be able to live stream today. I am hoping to be back tomorrow.