Daily Report – Bitcoin and Market Update (June 08 2020)
Weekly closed as a form of SFP (Swing Failure Pattern) for taking out highs of local resistance and tapping into 10450, while meeting rejection of these levels and closing the week as a form of spinning top candle shooting-star-wannabe. We’re still trading and closing above MA50 weekly, which confirms the bullishness of large picture. The close of the session added to the bullish momentum which still shows no signs of reversal. Although, Stoch is clearly diverging against TK momentum histogram. This suggests we are witnessing rather consolidation-type of move rather than actual trend. As any consolidation can work as accumulation or distribution, we should remain cautious while limiting trades that are not certain about the direction of further movements. Current moves on past 3 weeks might have been having a distributive nature, which means we rather should avoid over exposing ourselves to longs, especially when on leverage. Distribution would likely follow rising wedge pattern that if broken down would lead to tapping 7500s area to also fill CME breakaway gap 7600s- chances for that are real and should not be under estimated. At the same time, in case of upside breakout of the wedge, it would easily trigger shorts squeezing that would accelerate upside trend with easy break through 10.5k towards 12k in following weeks. Let’s dive into lower timeframes.
Daily closed as a spinning top high wave (long-legged) candle hammer-type, yet obviously for appearing inside a sideways movement it doesn’t work as a hammer. Momentum is in complete middle of nowhere as we speak. Neutral point with consolidative nature of past days movements. Current consolidation is forming more of an ascending formation of rising wedge, which technically is bearish reversal pattern if broken down. Legit break down can only come provided that we close a day below SMA50 8970 support. Until that happens, we stay inside the consolidation movement. If 10.5k resistance is reclaimed (breakout+successful retest held) then very likely we would visit 12k area fast – short squeezing might easily make the uptrend accelerate to fill 11700s CME breakaway gap from August 2019. Local resistance area is 10-10.2k. Local support area on daily is 9.3-9.6k
Middaily trading above MA50 12h which is also more bullish than not. If MA50 is lost by closing below the support 9450, it’s most likely going to find the next support at MA100 8970, which is also daily MA50. 8000 support provided by MA200 comes into play only with legit bearish close below rising wedge and SMA100. Then one can short the breakdown retest. While momentum HTF is staying bullish (with monthly that has recently turned bullish after 1 year bearish momentum period) I’d certainly not want to greedily short before super clean bearishness of the structure. For now there is no real, legit sell signal on any timeframe and SO FAR all supports of key importance have been held (it doesn’t mean it can never break down though). Momentum shows “shy” bulls trying to gain control over the market while no clean long signal on 12h to be seen either.
MTF trading inside a range / expanded flat. Still holding all MA supports while all of them are definitely ascending, which proves MTF trend is still up. Aggregated 50% retracement zone from the range highs and actual peak of the new range oscillate between 9100 and 9280 and this zone is considered strong short-term demand from technical point of view. Once this mid-range zone is lost there are high chances we retrace further down towards range lows at 8-8.2k MTF demand. Momentum bullish-oriented, while trading already near overbought area with no clean signals of reversal to the downside. For this reason, local trend has slightly higher chances for tapping into range highs of 10k rather than mid-range 9.1-9.2k.
Hourly trading inside a new range 9130-10430 with mid-range 50% retracement level at 9780. For this reason inside the new range, we are currently consolidating below the mid-range resistance. If this level is reclaimed with successful breakout and retest sequence, then most likely range highs area of 10.2-10.4k would be to follow. Consolidating under the resistance after sharp move up 9500-9800s is considered bullish. As long as we hold MA supports beneath at a very tight confluent level of 9620, we are more likely to break out to the upside. Closing middaily or 2 subsequent 4h sessions below 9620 might make the price action throw traders back towards 9400-9500 with chances of invalidation of the local rally. As you can read, there are a lot of mixed signals, which is very typical to sideways movements that we are trading in right now. This also is the reason for why it is so hard to trade inside such lack of directional movements – trends. Serious traders would traditionally not be interested to engage in such non-trending environment. Safest to wait for clean direction of the trend. Local longs are way more safer if we reclaim 50% mid-range level of 9780-9800 resistance area. If reclaimed and closed middaily session above 9800, it makes it much better opportunity of high probability long entries towards mentioned range highs. Other than that its not having clean reversal bearish signals, so no shorts are safe either. Remember that no position is also a position. I’m still 70% of my bitcoin holdings spot long btc for long term, while rest I trade usually futures with is simply waiting on the sideline for clean direction. Especially for those aware that participated in my recent long webinar that you can review with the link below.
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