Bitcoin Price Update for September 1, 2016
Market Commentary (BTC):
As we start to wrap up one of the slowest weeks in bitcoin's history in terms of price action, we continue to sit patiently in our long positions. Despite the possibility of a breakdown out of the medium term triangle consolidation, we still like the risk/reward profiles present in our VST and MT ProTrades. Having said that, we are currently not expecting any substantial increase in volatility over the next few days but we do think it will pick back up as we head into the latter half of the long holiday weekend. As has been the case for months, our bias remains to the upside, however we fully acknowledge the possibility that a dump down to the 500 $ area is possible prior to another test of the upside, which is why we are keeping tight stops on the shorter term trades.
Moving on to the technical details, we can see on the daily chart below that indeed the symmetrical triangle remains in full effect and price remains right in the middle of the formation. Also notice that price continues to hug the volume profile PoC despite large notches on either side it, and the SCMR upside reversal candle painted a few days ago remains intact as well (although it has been flirting with a cancellation so we are not out of the woods just yet). Speaking of SCMR, note that neutral bars are still coming in and we still do not have even minor dynamic support other than at the 525 $ level going back to June, so conviction is low on both sides of the ball.
As far as momentum and volume, it should come as no surprise that Willy and RSI are still chopping around in no man's land while MACD and the EMA's continue to flatten out. Additionally, PPO is still showing weak buy signals while the A/D line continues to move slowly to the upside on low exchange volumes, telling us that there is at least some weak demand still at these levels. Finally, the 200-day SMA remains in an uptrend thus confirming the longer term bull market and its lengthy consolidation, however multiple support and resistance areas both below and above the market will likely keep price range bound for the time being.
Generally speaking we continue to think there is a chance of a breakout from the triangle over the weekend and going into early next week, although we would be surprised to see things go beyond the OTE zones noted on the chart even if that materializes. Until then, however, the 540 $ support level and the 630 $ resistance level remain the ones to watch for potential breakouts. Until one of those key areas is tested the market will remain stagnant and, frankly, downright boring.
GLGT!
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