Bitcoin Price Update for September 13, 2016
Market Commentary (BTC):
The bitcoin bulls continue to defend the 600 $ level, a good sign considering this is an overbought market, although the lack of a continuation up into what has been stronger resistance in the 620 - 630 $ is mildly disappointing up to this point. Having said that, it does not appear to us as though either side really has an advantage in this environment, fundamentally or technically, which is why we think we could continue to chop around within the symmetrical triangle consolidation for the remainder of the week (at least). This would allow the oscillators to recharge and would likely lead to more pronounced squeeze conditions, both of which would be supportive of a move higher in the not too distant future.
Today we revisit the daily chart for a look at the entirety of the current triangle formation. We can see that despite the rally up to 630 $ last week, the bulls were still unable to break above the descending trendline and now we are pulling back to the middle of the pattern once again. Also notice that price is still in a pivot area which is keeping things elevated, and SCMR is painting neutral candles with dynamic support building at 570 and 594 $. Additionally, the 9/18 EMA cross is still bullish but is losing steam, the 200-day SMA remains in an uptrend, and we are currently in a volume profile notch area that could use some more attention.
Moving on, we can see that momentum remains a concern considering Willy is still overbought, RSI has rolled over, MACD is testing the zeroline again, and PPO is flashing minor sell signals. On the other hand, note that the A/D line is still climbing higher throughout this period of consolidation which confirms our thesis that this is still just a large shakeout within a broader bull market. For the time being we remain long in the VST ProTrade, although we are raising our stoploss to above breakeven, with a target back up near the upper triangle trendline which now sits between 620 - 625 $.
Generally speaking we are bullish going into the Fall, however we think there is a good possibility of another dip or two lower prior to an upside resolution out of this triangle. We hope to take the VST PT off soon on a bounce so that we can deploy fresh capital if/when price comes back down into our still active buy zones. Remember, given we are already long off of 480 $ in the MT ProTrade, we are simply trying to add some alpha to this play which is why smaller position size and a quicker trigger finger are probably the right way to approach the shorter term setups.
GLGT!
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