Market Commentary (BTC): Following the release of our price update yesterday, bitcoin continued to push to the upside reaching a high of 640 $ on the dot. Despite the need for a pullback the market was simply too bullish, however today we are getting at least a small pause that hopefully refreshes. As far as fundamentals go, there is still some near term uncertainty with regard to the release of the latest Core update and Roger Ver's new mining pool ViaBTC which is attempting to block SegWit. Having said that, we think this is a passing threat which leaves the medium to long term fundamentals conducive to a sustained rally higher over the next few years. For the technical perspective, let's take a look at the 6-hour chart below.
We can see that the near term EMA's are now stacking to the upside while the 200-period SMA continues it's steady journey higher, both of which tell us that the the market remains in rally mode despite the recent pause. Also notice that there was a small selloff immediately following a breakout failure above 640 $ which was stopped by what is now the new bullish pivot area shown in light blue. Considering price ripped through the OTE short zone like tin foil yesterday, in addition to how well it has held up today, we think there is a pretty good chance at a continuation to the upside once this minor consolidation is completed.
Moving on to momentum and volume we can see that the oscillators remain heavily overbought, although we still do not have any bearish divergences to speak of which means the bulls remain in control for the time being. Also note that PPO is flashing early warning signs as price extends well above the volume profile value area and PoC. Speaking of volume, A/D line continues its trek higher, getting a boost over the past few days, and the volume breakout from late Monday is still confirming the bullish bias.
Almost all of the main indicators that we watch, with the exception of the momentum oscillators, are signaling that a continuation to the upside is the most likely outcome over the course of the remainder of this week. That said, the current mini-consolidation is not yet over so we might have to be patient and neutral over the next few days in order to let the market settle into a new local bottoming area.
GLGT!
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