TexasWestCapital

BTC 15 Minute/4H charts 10/18/2018

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Good morning, traders. Price has been trading within this local TR for the past three days now. On the bright side, we have seen consistent higher lows during this time. The CBOE expiration yesterday didn't lead to much of anything - a $34 drop about an hour prior and then a subsequent rise of $78 into the evening. Demand remains prevalent at this time as the large volume spikes are most often associated with large green candles and when we see spikes in volume on black candles, those candles have long lower wicks and short bodies which denote absorption. We can also see some of the larger volume on small black candles which denote the same. Finally, there are also some small black candles with larger volumes which shows us that the effort is far exceeding the result meaning that demand is greater than supply. The volume , of course, is relative as it is lower overall, but I am specifically discussing the volume on the 15 minute chart within this local TR as price consolidates. All this being as it is, I have to also point out that recently we are seeing volume generally increasing on the downswings. This could be a sign that supply is increasing so traders must remain vigilant. Price has continued to fill the gaps created in this local TR , and if that continues then we can expect price to at least return to $6460. We should see this happen on a break of the descending dotted black resistance line that starts at the overnight high. Remember, price is consolidating upward toward $6467-$6490 so we should expect a pop. The question remains, will that pop be up or down?

The 4H chart shows us that price has exited the July triangle, however we have yet to see the pop and, as such, traders should remain cautious at this time. You can see that I have adjusted, what appeared to be, a symmetrical triangle to an ascending triangle . The blue price lines denoting initial targets are still valid however. The ascending triangle should just mean that price is more likely to pop up than down, but in order to do so we need to see price make some upward moves today and tomorrow. We can see RSI trending down, but this may be a flag signalling an impending breakout to the upside. Until RSI breaches that ascending resistance line, traders must give weight to the fact that RSI is dropping. MACD's histogram has been moving within a horizontal channel since the beginning of September. We can also see the MACD , itself, has been moving within a descending channel during this same period though we had a recent breach of the top and are currently possibly retesting it as support. Why is this important? Because price is just beyond the July triangle and is printing an ascending triangle , shorts are over-extended, RSI is possibly printing a bull flag , and the MACD histogram has trended sideways. These are all bullish , or neutral at worst, situations. A strong move up at this point from the MACD should indicate that all the other patterns will play out bullishly as well. In addition to all of this, OBV has continued to trend higher although price is lower than 10/14's spike.

As mentioned, shorts are building up once again, currently sitting at 35482. The shorts/longs ratio is now at 1.6035. Generally, these things don't bode well for shorts but price is in a precarious position, so traders may find it most beneficial to wait to see how price plays out before entering a position. 1D MACD just notched a bullish cross and has been trending upward since the beginning of September, and RSI is near the resistance of the symmetrical triangle that it has been printing since June/July. In other words, there's a lot of possible bullishness waiting to be unleashed, but it's just potential. There is no guarantee price will break up. For me, there continues to be no good reason to enter a trade, long or short, at this time. The risk far outweighs any potential reward in doing so. As such, I will continue to watch the 4H TR support and resistance (denoted by the horizontal black lines) for price breaches which would indicate likely continued movement within that direction.
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Comments

Very nice TA and due diligence here. Like the rational you emphasise behind your assumptions very helpful. Nice work whichever way it works out.
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