Good morning, traders. Price has continued upward as anticipated yesterday. However, this does not mean that we don't have to consider the possibility of a move down. The premium on Bitfinex is beginning to subside a bit, although it still remains about $300 higher. Price has stuck around the top of the TR, but sell pressure sits at $6450-$6500 with another layer of pressure around $6590/$6600. We can see many volume spikes and small spread candles at the lows of where price has been hovering overnight. This appears to be absorption. If so, then we can expect further upward movement. OBV has been printing a pennant since the pop in price, which means I will be watching for a break through the top of it to confirm bullish momentum. Realistically, we still need to see price breach and remain above the top of the yellow box denoting the local TR. Further upward progression, through the horizontal blue line would take price out of the larger TF TR.
The 4H TR shows the bigger picture and the larger TR I was speaking about. We can see price pushing against the descending resistance line of the July triangle. It appears that price may be printing an LPS at the current position. This would be in anticipation of further movement up and into the resistance between the top of the TR (upper horizontal black line) at $6587 and the failed upthrust (horizontal blue line) at $6826. Generally, we expect a move up into this area (JAC/SOS) followed by more consolidation (BUEC/LPS) before a thrust up and out of the area (SOS) and another consolidation. It could look something like the red line I've used as an outline. This isn't a time-based outline, just an outline to give traders an idea of what I am expecting. That doesn't mean we can't see a sudden surge upward in the form of a short squeeze. BTCUSD shorts are building back up again and currently sit at 33,800. Maybe more importantly, the shorts/longs ratio is over 1.53. Historically this is very bad for short positions so we will see how it plays out. 4H OBV continues to rise, but the RSI is at 66 which is near overbought. We would likely need to see little selling and a lot of buying/short squeeze if price were to follow through with such an upthrust. If C.O. has done their job well, then that shouldn't be a problem as significant supply would have been removed from market. In bullish moments, we have seen RSI push above 85-90, so there is still room to run. Based on the widest part of the triangle, if price does push through and continue up then it should be targeting $9090/$9100. This would confirm the compound fulcrum (move above $7400 area) and provide a higher high (move above $8500) thereby signalling a likely reversal out of the corrective market and confirming a bullish trend since June.
As always, if we see price drop below the bottom of the TR at $6100, I would begin preparing for the possibility of a new low below the corrective low seen in June. That doesn't mean it must happen, only that I will be getting ready to put a different plan in place to take advantage of that movement. At this time, I still don't see any reason to believe price must necessarily go down and remain down below $5000, so my expectation would be for a spring or terminal shakeout.
The 4H TR shows the bigger picture and the larger TR I was speaking about. We can see price pushing against the descending resistance line of the July triangle. It appears that price may be printing an LPS at the current position. This would be in anticipation of further movement up and into the resistance between the top of the TR (upper horizontal black line) at $6587 and the failed upthrust (horizontal blue line) at $6826. Generally, we expect a move up into this area (JAC/SOS) followed by more consolidation (BUEC/LPS) before a thrust up and out of the area (SOS) and another consolidation. It could look something like the red line I've used as an outline. This isn't a time-based outline, just an outline to give traders an idea of what I am expecting. That doesn't mean we can't see a sudden surge upward in the form of a short squeeze. BTCUSD shorts are building back up again and currently sit at 33,800. Maybe more importantly, the shorts/longs ratio is over 1.53. Historically this is very bad for short positions so we will see how it plays out. 4H OBV continues to rise, but the RSI is at 66 which is near overbought. We would likely need to see little selling and a lot of buying/short squeeze if price were to follow through with such an upthrust. If C.O. has done their job well, then that shouldn't be a problem as significant supply would have been removed from market. In bullish moments, we have seen RSI push above 85-90, so there is still room to run. Based on the widest part of the triangle, if price does push through and continue up then it should be targeting $9090/$9100. This would confirm the compound fulcrum (move above $7400 area) and provide a higher high (move above $8500) thereby signalling a likely reversal out of the corrective market and confirming a bullish trend since June.
As always, if we see price drop below the bottom of the TR at $6100, I would begin preparing for the possibility of a new low below the corrective low seen in June. That doesn't mean it must happen, only that I will be getting ready to put a different plan in place to take advantage of that movement. At this time, I still don't see any reason to believe price must necessarily go down and remain down below $5000, so my expectation would be for a spring or terminal shakeout.