Bitcoin Price Update for September 23, 2016
Market Commentary (BTC):
While the bitcoin price remains in the 590 - 600 $ range that we identified yesterday, there have been some interesting developments on the slightly longer term charts that we think are worth noting. We still think that a final washout down into our VST buy zone is possible, however it is looking less and less likely with each day that goes by in which price is above 590 $. At this point we are almost ready to start nibbling longs down around current levels in case this thing starts pushing to the upside over the weekend, although we will wait to add more substantial positions until we we get down into the more favorable 570 - 580 $ region.
As is typically the case on Friday, we like to take a look at a more medium term chart in order to gain some context going into the weekend. We can see on the updated daily chart below that price is still inside the symmetrical triangle, and is now below the light blue pivot area. Additionally, SCMR is still painting primarily red candles, although we do have a potential upside reversal working today, and market structure remains relatively bearish so we want to stay somewhat cautious for the time being. Also notice how price is below the flatlined EMA's while the 200-day SMA continues to push to the upside, now sitting around 545 $, which could cause a squeeze if they continue to converge. Despite these rather mixed signals, we do see some more bullish evidence which we discuss below.
First of all, the triangle formation is nearing its apex so we know a breakout resolution is coming within the next 4 - 6 weeks and we still prefer the upside. This preference is due to a number of factors, one of which is a steadily increasing A/D line that has been in an uninterrupted uptrend since June, and another is the fact that the momentum oscillators are bullishly recharging despite little movement to the downside in price. Also notice that PPO is back to neutral from overbought, MACD is still bullishly divergent, and there is alot of technical confluence, and thus support, between 500 - 580 $.
While we are currently not expecting a selloff all the way down to the low-500's $ at this time, we are still hopeful that we get a shot to reload in the slightly lower ST ProTrade buy area between 570 and 580 $. Having said that, we are getting a creeping feeling that we might not get another chance down there before the market tests higher levels once again, which is why we want to try to catch a small long scalp around current levels (much like we did with our previous VST PT). Generally speaking we think the market is getting close to breaking out of this multi-month consolidation, but there are likely a few more weeks of chop before we get the impulse move we are looking for to catalyze the next leg of the bull market.
GLGT!
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