I was promised price appreciation, not Bitcoin diamonds
Good morning, traders. Overnight, we saw price move as I outlined it might during last night's live stream. It broke out of the ascending triangle and reached the resistance of the descending broadening wedge. TensorCharts.com shows resistance building again today, currently around the $6340-$6360 area as well as $6600, $6650, $6700, $6800, and $6850. This is the work that must be done by bulls. Shorts remain high and within reach of the ATH that occurred just before the April 12th short squeeze, having recently been rebuked by the daily R4 pivot. Longs have begun rebuilding after being supported by the daily S1 pivot a day ago. Additionally, shorts are in overbought while longs just bounced off oversold. The expectation is that shorts will build a bit more and venture deeper into overbought territory as longs continue to rebuild. The shorts/longs ratio currently sits at 1.2920:1, which is well above the 1:1 ratio that always results in a short squeeze or unwinding, and is also in overbought territory. As a result we have been watching price move sideways for about 11 days now which is causing many traders to give up and sell as they await directional movement. More emotional traders have been FOMOing short and long when price moves quickly and, as a result of their over-leverage, end up getting liquidated after little movement in the opposite direction.
As I discussed last night, it appears that price is building a diamond as it continues to print daily candles with long wicks and small bodies. This suggests indecision at this juncture, with the current bright side being that the December log line has supported the retest as support so far and price has printed a lower high. The latter will only be confirmed, however, once price prints a higher high which means we need to see it move up from here and breach the $8500 high from July 24th. If price happens to do this, it would be a very bullish signal. Daily RSI sits at 39 and is rising and MACD continues to gravitate toward the signal line. The 50 day volume average has been increasing as of late and the spikes are leveling out which provides a possible clue into market movement. I have previously pointed out that during July's leg up we saw volume increasing with price which was the first time we've seen that happen in 2018. Volume and price increasing together is bullish as it signals demand. If this continues to hold, then the current state of price may be nothing more than larger interests filling their longs as traders get bored/question their positions and sell. It also serves another purpose in that it leads to a over-building of short positions as other traders buy into the emotionally-bearish narrative of further downside. The timing of all this could be leading up to a strong short squeeze and boost in price, however this is nothing more than conjecture at this time. We need to see follow-through. It is possible that we could continue to see sideways action into the beginning of next week.
The 1H chart shows price movement as outlined last night, as well as this morning's support on the descending red line. It's still early, but price may be printing a pennant, so it should be monitored. If so, then the target based on the flagpole would be $7200. Currently it appears that price is building pressure toward the $6350 area of resistance. A breach of this level should see price reaching $6415, at least, and likely the top of the pennant. Failure of price to hold this area will have it looking for immediate support at $6185 and the box below it.
As always, we take a look at multiple additional charts during the live streams at 10 a.m. CST and 9 p.m. CST every week day, so while TV will not allow me to link it, I have no doubt you will find us easily.
As I discussed last night, it appears that price is building a diamond as it continues to print daily candles with long wicks and small bodies. This suggests indecision at this juncture, with the current bright side being that the December log line has supported the retest as support so far and price has printed a lower high. The latter will only be confirmed, however, once price prints a higher high which means we need to see it move up from here and breach the $8500 high from July 24th. If price happens to do this, it would be a very bullish signal. Daily RSI sits at 39 and is rising and MACD continues to gravitate toward the signal line. The 50 day volume average has been increasing as of late and the spikes are leveling out which provides a possible clue into market movement. I have previously pointed out that during July's leg up we saw volume increasing with price which was the first time we've seen that happen in 2018. Volume and price increasing together is bullish as it signals demand. If this continues to hold, then the current state of price may be nothing more than larger interests filling their longs as traders get bored/question their positions and sell. It also serves another purpose in that it leads to a over-building of short positions as other traders buy into the emotionally-bearish narrative of further downside. The timing of all this could be leading up to a strong short squeeze and boost in price, however this is nothing more than conjecture at this time. We need to see follow-through. It is possible that we could continue to see sideways action into the beginning of next week.
The 1H chart shows price movement as outlined last night, as well as this morning's support on the descending red line. It's still early, but price may be printing a pennant, so it should be monitored. If so, then the target based on the flagpole would be $7200. Currently it appears that price is building pressure toward the $6350 area of resistance. A breach of this level should see price reaching $6415, at least, and likely the top of the pennant. Failure of price to hold this area will have it looking for immediate support at $6185 and the box below it.
As always, we take a look at multiple additional charts during the live streams at 10 a.m. CST and 9 p.m. CST every week day, so while TV will not allow me to link it, I have no doubt you will find us easily.
