Market Commentary (BTC):
Bitcoin Price Update for October 6, 2016
Given that bitcoin is STILL trapped under 610 $ this morning and remains inside the daily symmetrical triangle formation that we showed in yesterday's update, today we want to focus on the short term for clues as to where we might be headed over the weekend. It is clear on said daily chart that a move is coming considering price is getting squeezed between the triangle downtrend line and SCMR dynamic support. Any move to the upside will break the formation, and conversely a failure means a retest of support around 595 $. Which brings us to the 4-hour chart below which is showing some interesting features related to these key medium-term technical areas.
Notice that we had another symmetrical triangle consolidation working on this timeframe for awhile, however this one was broken about a week ago. We can see that there wasn't much follow-through after the break, although price was able to stay above the apex and is now following the uptrend line higher. Also note that we still have strong SCMR dynamic support building at the aforementioned 595 $ level, which is around where the OTE long zone and a volume profile notch both sit. Additionally, the 200-period SMA remains in a supportive uptrend and is now sitting around 605 $ while the near term EMA's try to make a move to the upside.
Moving on to the oscillators we can see that Willy and RSI have broken above their centerlines while the Stochastic just gets going to the upside, and PPO is still neutral. Additionally, trading volumes are picking up, the A/D line is still trending higher, and volume profile looks better than it has it quite a long time complete with very thin air above 615 $. Finally, we have OTE zones at 595 - 600 $, as well as between 615 - 620 $, so even if we do get a minor breakout from this 600 - 610 $ range this weekend we are not expecting a ton of volatility (at least not yet).
All things considered we want to remain in our current positions despite the lack of price action over the course of this week. We still think there is a good chance that price holds support in the 605 $ area on selloffs while testing slightly higher levels in the previously mentioned OTE short zone between 615 and 620 $. This is where we will be taking profits on the VST long ProTrade we remain in, profits which we will look to redeploy on a retest of either the 590 - 600 $ area or hopefully down in the ST buy zones if we are lucky.
Despite what could be a relatively volatile weekend compared to what we have been getting recently, we still don't think the market is ready to attempt to break away from this broad and extended consolidation range between 450 - 700 $. We are getting closer to a resolution, but we are not there yet.
GLGT!
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