Bitcoin Price Report for January 18, 2017
Jan 18, 2017 --- (ARCHIVED) Free Reports
Market Commentary:
As bitcoin's price rose above 900 $ yesterday, we couldn't shake the feeling that the market does not feel quite done with the 800's $ yet. Lo and behold, this morning we find the price selling off following a near term head and shoulders formation that spooked traders overnight. Given that we have yet to hear of any news regarding bitcoin that could be causing the selling, we think this is a purely technical move that is actually overdue. Also, contrary to what you may be telling yourself, the speed with which this is materializing should be encouraging for bulls since bull market pullbacks are typically short and brutish. While we do not expect the dumping to continue for much longer, we also don't think a bounce back above 900 $ is all that likely over the near term either.
With that said, lets turn to the charts for another look at the short to medium term technicals. We can see on the 4-hour chart below that price was able to briefly break into the Ichimoku Cloud and above the 200 SMA, but over the past few hours has fallen precipitously from those levels. Also note that what were steady [members-only text] SCMR candles have quickly shifted to [members-only text] given a [members-only text] bar is currently trying to paint, and it is probably not a coincidence that the move lower began around historical dynamic resistance off of the [members-only text] level. Additionally, the momentum indicators were stretched and are now rolling over while we tag the top of the [members-only text] zone and a rather large volume profile notch between 825 - 875 $ (which we mentioned yesterday). We would not be surprised to see price drop slightly more from here before settling into another near term consolidation range.
Moving on to the daily chart, things remain a bit more sanguine considering SCMR painted a [members-only text] candle yesterday and is showing a [members-only text] one today, although the more important feature is that there is not yet a [members-only text] like we usually get during pullbacks like this. We can also see that price is still above the broken uptrend line and Ichimoku Cloud, but its back below the lower supply area and historical [members-only text] level. Having said all of that, momentum is still relatively stretched to the downside, the A/D line continues to trend to the upside despite recent volatility, and sell volumes on the current drop are not all that impressive. The medium term charts continue to indicate that the market remains bullishly biased overall, but is not ready to move out of the current [members-only text] trading range due to lack of price discovery here so far.
Despite the price action we've seen over the past 12 hours there is not much change to our forecasts regardless of timeframe. We still think that the market needs to [members-only text] prior to trying to get long again, however we think downside is limited to the low [members-only text]over the very short term and [members-only text] slightly longer term, both of which present attractive buying opportunities from a risk/reward perspective in our opinion.
Posted ProTrade Ideas:
1a.) **Bitcoin ProTrade - Very Short Term [UPDATED on 1/18/2017]**: We will consider a [members-only text] position in the [members-only text] area with a stop around [members-only text] and a target of [members-only text].
2.) **Bitcoin ProTrade - Short Term [UPDATED on 1/18/2017]**: We closed our [members-only text] position off of the [members-only text] level at breakeven for no gain or loss.
3.) **Bitcoin ProTrade - Medium Term [UPDATED on 1/17/2017]**: We will consider a [members-only text] on a move to the [members-only text] area with a stop around [members-only text] and a target of [members-only text].
4.) **Bitcoin ProTrade - Long Term [ACTIVE; UPDATED on 1/10/2017]**: We will stay [members-only text] off of the [members-only text] level with a stop around [members-only text] and a target of [members-only text].
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