Bitcoin Price Report for January 25, 2017
Jan 25, 2017 --- (ARCHIVED) Free Reports
Market Commentary:
Following an uneventful break below the 900 $ level yesterday, the market has since stalled out once again as traders continue to attempt to decipher what the new dynamic in the Chinese markets will do to the price over the medium to long term. It is apparent that China's bitcoin liquidity is not nearly as deep as we were led to believe by the army of bots trading on these fee-free exchanges, however they are still doing more volume than the Western exchanges such as Bitfinex and Bitstamp. These fundamental uncertainties, combined with the upcoming Chinese New Year holidays which stretch from January 27th to February 2nd, should put a damper on price action over the near term. The technicals seem to be confirming this notion as well, so let's move on to the charts to make sure.
Today we return to our trusty 4-hour and daily charts for the short to medium term view of the market. We can see below on the 4-hour that price remains in the middle of the still bearish Ichimoku Cloud, and is now back below both the 200 SMA as well as the 9 and 18 EMA's. Also note that price continues to struggle with the volume profile point of control (PoC) on what have become mostly [members-only text], although we do have a [members-only text] candle from yesterday that is something to watch going forward. Additionally, market structure is downright bearish and price action remains heavy, however trading volumes are anemic and there is still no new [members-only text] to speak of. Finally, the momentum oscillators do have a little bit of room to run to the downside, but not much, and some are even starting to show some [members-only text] signals. Throw in an A/D line that remains buoyant in the face of the China uncertainty and we think the market remains in an extended bull market consolidation.
Moving on to the daily chart and we can see that the [members-only text] from yesterday did not end up painting, so what we go was more [members-only text]. Notice that price is now at the bottom of the intermediate term supply area, which we mentioned might be the bottom of the near term trading range, although it looks like market structure is turning [members-only text] here as well so we need to keep an eye on the downside for the time being. Given that we are currently below volume profile PoC on neutral PPO and bearish MACD and Stochastics, we think that a continuation to the downside over the near term is more likely than a return to 900+ $ right away. Having said that, we remain highly interested in the [members-only text] in terms of buying the dip, especially considering that the A/D line remains elevated despite increased selling pressure recently. Again, bull market consolidation with a slight bearish bias seems to be what the charts are indicating for now.
All things considered, both fundamental and technical, we think the next few weeks could end up being surprisingly calm, likely settling into a trading range somewhere in between [members-only text] depending on where local tops and bottoms are put in over the course of this week. We will be watching price action closely for signs of how the market is transitioning into this new trading paradigm regarding China, but generally speaking we want to try to [members-only text].
Posted ProTrade Ideas:
1.) **Bitcoin ProTrade - Very Short Term [UPDATED on 1/23/2017]**: 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 1/23/2017]**: 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].
3.) **Bitcoin ProTrade - Medium Term [UPDATED on 1/23/2017]**: 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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