Bitcoin Price Update for September 9, 2016
Market Commentary (BTC):
The bitcoin price rally that we have seen over the past week has stalled in the 620 - 630 $ resistance area, although it is holding up much better than we initially expected. While we are not ready to take the possibility of a deeper pullback off of the table, we do think that odds are increasing that we simply get a continuation following a short but necessary consolidation in this region. That being said, we still favor a somewhat more substantial dip down into the 600 $ area which we would be buyers of due to a confluence of technicals around there. Overall the market continues to look bullish, we just need a recharge to refill the tank for the next move.
We revisit the 6-hour chart today due to the fact that there are some interesting things materializing right now. First of all, notice that price has finally broken above the symmetrical triangle downtrend line, and ever since has been following it to the downside as a test. As long as the bulls can hold this line then the chances of a continuation higher increase significantly, however a break of it would likely lead to the pullback we have been waiting for. Additionally, total volume and market structure looks fairly bearish at these levels despite SCMR continuing to paint bright green bullish candles. Speaking of SCMR, new dynamic support continues to build below the market in our 590 - 600 $ buy zone, as well as down in the 570 $ area. Both of these support zones are relatively strong compared to the old dynamic resistance at 630 $ so at some point we do expect it to break to the upside.
Moving on we can see that Willy remains in officially overbought territory, RSI is pulling back but has some room to run before testing the centerline, MACD is painting a nasty bearish divergence, and PPO is painting strong sell signals. Conversely, the A/D line continues to press higher indicating that buyers are still adamant at these levels, and volume profile actually looks pretty healthy compared to what we were looking at last week. Finally, the 200 SMA is still bottoming out but should provide support in the 600 $ area, while the EMA's remain bullish despite the recent pause.
All in all, we have a rather mixed picture technically speaking going into this weekend. There is a chance that the bulls hold the 615 $ level, where the triangle trendline is sitting, which would likely catalyze another leg to the upside late in the weekend going into next week (perhaps up to the 650 $ area). Otherwise, we are expecting a small breakdown over the next few days which would lead price into our ProTrade buy zones that we have eyeing in order to add to our MT trade. Either way, we feel ready to go with the flow of the market this weekend regardless of what materializes given our very favorable positioning from the early August dump below 500 $.
GLGT & have a great weekend!
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