Bitcoin showing continued buying pressure, but is it enough?
Good morning, traders. No big moves overnight, but we did test the recent highs around $7120 once more. Every time buyers push up into this area they are weakening the resistance by setting off the orders sitting there. So the shorts get triggered and then we see them getting absorbed which is why, even though we have watched extensive selling occur at these levels via tucsky.github.io/SignificantTrades/ price continues to remain above $7900 while notching higher lows. This is demand playing out as price consolidates near that $7120 immediate resistance and it remains a possibility that we could see a strong, sudden push up at any time, especially with the shorts/longs ratio above 1:1 still. Visually, price has bounced off the ascending channels median equilibrium line as suggested it would during last night's live stream and TA video. That doesn't mean it must break out upward, only that traders should be prepared so that they are not surprised if it does.
But here's the challenge. As you can see on this 1H Bitfinex chart, it appears that price is building an ascending wedge which would indicate that price is most likely to drop in the short term (small retrace) before continuing higher. However, the other charts from the various exchanges show a clear ascending triangle in that same area which would indicate that price is most likely to continue higher with a target of $7235. (We will take a look at this during this morning's live stream.) If the latter plays out, then my expectation is to see shorts begin to cover and or get liquidated as price will have broken that $7200 level. RSI and MACD are definitely bullish, and OBV is slightly lower at the moment but that could be short-lived if we saw a strong push by this early afternoon. We should also note that the current ascending wedge/ascending triangle is building right on top of the larger ascending wedge and under/at the bottom of the next green box, hence the smaller TF consolidation. Therefore, volume arguments at this time, based on large TFs mean next-to-nothing because they lack the context of what's going on in these smaller TFs. In other words, the consolidation on this smaller TF explains the drop in volume and is to be expected. A push that gets price above $7200 is likely to accelerate price appreciation and volume should increase as well, likely providing a higher high in volume on those larger TFs and thereby continuing the rising volume pattern that we have been watching since May.
Looking at the 1D chart, we can see the potential for a tweezer top to complete on this TF. As such, we have to consider that price closing where it is would provide a pause or potential reversal, which needs confirmation via a red candle the next day, but it would also be considered an inside bar which is often just a pause before continued trend movement. The other thing to watch for is a push up that doesn't hold. We could potentially see price thrust upward into $7200 and higher, but then fall back down lower than where it is right now by the daily close. In that case, the candle could morph into a pinbar signalling a more likely reversal. So, we need to see price push up and remain higher - the closer price closes to the high of the day, the more bullish the move and likely continuation of upward momentum - to feel more confident in bullish continuation right now. All that being said, as I mentioned during last night's stream, a pullback/retracement here is expected by many but isn't showing signs of following through just yet. Traders must be prepared at this juncture for either movement. If price retraces from here, then it should find support in the green $6800 box. Failure of that box to hold means I'd like to see support make itself known at $6600-$6650. While price can fall further and still be bullish, the lower it drops the more concerned I become about the lack of bullish follow through. Noted support levels are shown on the 1H TF chart. Retail exchange volume dominance is increasing and Bithumb is opening up again which should give traders even more reason to be bullish rather than bearish at this time.
As always, I am live twice each weekday at 10 a.m. and 9 p.m. CST on another social platform. TV doesn't allow advertising, but I am sure you can easily find us if you're interested in viewing the live stream where we go much further in-depth with the analysis, answer questions, etc.
But here's the challenge. As you can see on this 1H Bitfinex chart, it appears that price is building an ascending wedge which would indicate that price is most likely to drop in the short term (small retrace) before continuing higher. However, the other charts from the various exchanges show a clear ascending triangle in that same area which would indicate that price is most likely to continue higher with a target of $7235. (We will take a look at this during this morning's live stream.) If the latter plays out, then my expectation is to see shorts begin to cover and or get liquidated as price will have broken that $7200 level. RSI and MACD are definitely bullish, and OBV is slightly lower at the moment but that could be short-lived if we saw a strong push by this early afternoon. We should also note that the current ascending wedge/ascending triangle is building right on top of the larger ascending wedge and under/at the bottom of the next green box, hence the smaller TF consolidation. Therefore, volume arguments at this time, based on large TFs mean next-to-nothing because they lack the context of what's going on in these smaller TFs. In other words, the consolidation on this smaller TF explains the drop in volume and is to be expected. A push that gets price above $7200 is likely to accelerate price appreciation and volume should increase as well, likely providing a higher high in volume on those larger TFs and thereby continuing the rising volume pattern that we have been watching since May.
Looking at the 1D chart, we can see the potential for a tweezer top to complete on this TF. As such, we have to consider that price closing where it is would provide a pause or potential reversal, which needs confirmation via a red candle the next day, but it would also be considered an inside bar which is often just a pause before continued trend movement. The other thing to watch for is a push up that doesn't hold. We could potentially see price thrust upward into $7200 and higher, but then fall back down lower than where it is right now by the daily close. In that case, the candle could morph into a pinbar signalling a more likely reversal. So, we need to see price push up and remain higher - the closer price closes to the high of the day, the more bullish the move and likely continuation of upward momentum - to feel more confident in bullish continuation right now. All that being said, as I mentioned during last night's stream, a pullback/retracement here is expected by many but isn't showing signs of following through just yet. Traders must be prepared at this juncture for either movement. If price retraces from here, then it should find support in the green $6800 box. Failure of that box to hold means I'd like to see support make itself known at $6600-$6650. While price can fall further and still be bullish, the lower it drops the more concerned I become about the lack of bullish follow through. Noted support levels are shown on the 1H TF chart. Retail exchange volume dominance is increasing and Bithumb is opening up again which should give traders even more reason to be bullish rather than bearish at this time.
As always, I am live twice each weekday at 10 a.m. and 9 p.m. CST on another social platform. TV doesn't allow advertising, but I am sure you can easily find us if you're interested in viewing the live stream where we go much further in-depth with the analysis, answer questions, etc.