Good morning, traders. I mentioned some things to watch for on Friday and stated that I would be wary around $12500 if we didn't see strong demand following through on a move up. Sure enough, price was rejected at around $12450 and has been moving steadily downward since. Ultimately, it seems like price is just building a base before moving up higher, similar to what it did at $5000 and $8000, but this is very preliminary assumption. Novice traders often want answers immediately, but the market takes time to develop. They also tend to relish in conspiracy theories about huge market manipulations. Don't be that person. Just pay attention to what's going on rather than concoct some story. Sideways movement gives us some time to step back and observe. In other words, patience is the name of the game at the moment. Luckily for us, alts have been popping, so there is some trading to be done while waiting for Bitcoin to let us know what it is going to do.
The daily TF shows possible hidden bullish divergence in RSI over the past 4 days. However, we would need to see price move up by the close of today's candle, the higher the better, to likely confirm it. We can also see that new pivots have printed and price is sitting on the daily pivot. Of course bouncing off the pivot would be bullish and we would look for price to target the R1 pivot/swing high. When looking at the current price level and the possible hidden bullish divergence (which, if it plays out, means continuation upward) we could be seeing a double bottom forming. This is after the double top that printed and has a target of ~$10200. As with all pattern targets, this target is general rather than specific. In other words, price many times does not completely reach the pattern target, and sometimes it surpasses it, but the target gives us an idea of where to look. If the double bottom does print, then a close above the swing high of $12465 between the two possible bottoms would confirm it. At that point, the target would be ~$16345.
The weekly candle looks ugly though, and that's the biggest signal that gives me pause at this time. It is best described as a gravestone doji which indicates a possible reversal on this large TF. However, without confirmation that price is headed down (large body bearish candlestick this week) it remains just a possibility and, thus, is a pause in the upward trend for now. While it does not necessarily mean that price will continue a larger correction toward $8000/$8500, it is definitely worth paying attention to. As a matter of fact, we could see the move up to $16345, for instance, before the end of the week and end up printing another large upper wick on a weekly candle as price drops once more. This could, theoretically, give us tweezer tops on the weekly which would be a strong signal that the sideways movement may be extended for a while and we could see $9500 or, if that doesn't hold, $8500. In that case, I would expect a full-on alt season to be in swing. All that being said, we can see that price is at the EQ of the weekly demand zone which explains the order book that I discuss below.
The order books are currently showing exceptional bidding around $10K as expected and, again, at $9500-$9600. However, overall, it is strong from this point downward. To put it into perspective, Kraken order books are showing 1100 BTC bids down through $10K or 2100 through $9500. Asks, on the other hand, are showing only 1275 BTC through $14250. What this means is there is significantly more interest in buying within $1000 below the current level than there is in selling $3500 above the current level. As a matter of fact, we can see that it costs almost the same amount of BTC for price to drop $650 as it does for price to rise $3600. While these orders can be pulled if price drops, and moving up would see some added to the ask side, it does give us an idea of the current market interest levels. If real demand shows up, price would have a relatively easy move upward, and this is why traders should be patient and allow price action to play out at the moment.
The 3D TF is currently playing out the bearish divergence it printed. The 12H TF still has a possibility of hidden bullish divergence, similar to the daily, playing out. However, on the 12H TF, price is under the newly-formed pivot which means we could see it bounce off the S1 pivot at $9400. The 1H TF is showing multiple bullish divergences playing out consecutively. This often happens as demand begins to overcome supply. We can see supply volume dropping, overall, as price as reached toward the mid-$10Ks while demand volume appears to potentially be picking up slowly. Specifically, the daily candle, which still has about 1/3 of the day to go before it closes, is currently showing a large supply bar but very small candle spread. If the day closes similar or better, then that would be bullish. Finally, the CME has daily gaps down into the $8Ks, however there have been times in the past where it has taken a month to fill similar gaps. So, what I am saying is what I have continued to say -- patience is key. Let the market show you what it's going to do and THEN enter. Don't try to guess what it's going to do and enter before confirmation because that will most likely find you at the losing end of a trade. We will be talking about all of this and more in this morning's video update at the YouTube link below.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own. When you do, be sure to explore the other TFs to see what I'm watching on those TFs.
The daily TF shows possible hidden bullish divergence in RSI over the past 4 days. However, we would need to see price move up by the close of today's candle, the higher the better, to likely confirm it. We can also see that new pivots have printed and price is sitting on the daily pivot. Of course bouncing off the pivot would be bullish and we would look for price to target the R1 pivot/swing high. When looking at the current price level and the possible hidden bullish divergence (which, if it plays out, means continuation upward) we could be seeing a double bottom forming. This is after the double top that printed and has a target of ~$10200. As with all pattern targets, this target is general rather than specific. In other words, price many times does not completely reach the pattern target, and sometimes it surpasses it, but the target gives us an idea of where to look. If the double bottom does print, then a close above the swing high of $12465 between the two possible bottoms would confirm it. At that point, the target would be ~$16345.
The weekly candle looks ugly though, and that's the biggest signal that gives me pause at this time. It is best described as a gravestone doji which indicates a possible reversal on this large TF. However, without confirmation that price is headed down (large body bearish candlestick this week) it remains just a possibility and, thus, is a pause in the upward trend for now. While it does not necessarily mean that price will continue a larger correction toward $8000/$8500, it is definitely worth paying attention to. As a matter of fact, we could see the move up to $16345, for instance, before the end of the week and end up printing another large upper wick on a weekly candle as price drops once more. This could, theoretically, give us tweezer tops on the weekly which would be a strong signal that the sideways movement may be extended for a while and we could see $9500 or, if that doesn't hold, $8500. In that case, I would expect a full-on alt season to be in swing. All that being said, we can see that price is at the EQ of the weekly demand zone which explains the order book that I discuss below.
The order books are currently showing exceptional bidding around $10K as expected and, again, at $9500-$9600. However, overall, it is strong from this point downward. To put it into perspective, Kraken order books are showing 1100 BTC bids down through $10K or 2100 through $9500. Asks, on the other hand, are showing only 1275 BTC through $14250. What this means is there is significantly more interest in buying within $1000 below the current level than there is in selling $3500 above the current level. As a matter of fact, we can see that it costs almost the same amount of BTC for price to drop $650 as it does for price to rise $3600. While these orders can be pulled if price drops, and moving up would see some added to the ask side, it does give us an idea of the current market interest levels. If real demand shows up, price would have a relatively easy move upward, and this is why traders should be patient and allow price action to play out at the moment.
The 3D TF is currently playing out the bearish divergence it printed. The 12H TF still has a possibility of hidden bullish divergence, similar to the daily, playing out. However, on the 12H TF, price is under the newly-formed pivot which means we could see it bounce off the S1 pivot at $9400. The 1H TF is showing multiple bullish divergences playing out consecutively. This often happens as demand begins to overcome supply. We can see supply volume dropping, overall, as price as reached toward the mid-$10Ks while demand volume appears to potentially be picking up slowly. Specifically, the daily candle, which still has about 1/3 of the day to go before it closes, is currently showing a large supply bar but very small candle spread. If the day closes similar or better, then that would be bullish. Finally, the CME has daily gaps down into the $8Ks, however there have been times in the past where it has taken a month to fill similar gaps. So, what I am saying is what I have continued to say -- patience is key. Let the market show you what it's going to do and THEN enter. Don't try to guess what it's going to do and enter before confirmation because that will most likely find you at the losing end of a trade. We will be talking about all of this and more in this morning's video update at the YouTube link below.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own. When you do, be sure to explore the other TFs to see what I'm watching on those TFs.