Hi traders, let's look at Bitcoin.

Bitcoin.

These last two weeks have been rather uneventful, barring the expected rejection of 9 Bitcoin ETF proposals by SEC which barely moved the market at all except for a little dump which was quickly absorbed.

The next big fundamental event to look forward should now be SEC's review of the CBOE ETF around September 30th but keep in mind that SEC could also leak information about their decision before the deadline like they did for the legal status of Ethereum back in June.

Technicals.

The larger time frame is sending conflicting signals. On the one hand, there is this larger bearish descending triangle pattern:

And as you might know, in traditional financial markets, descending triangles are statistically significant patterns with a 64% chance of break down to the downside according to Bulkowski.

On the other hand, however, you can see that the weekly Shochastic RSI has started to cross over:

Which has historically been a rather solid indicator of a bull move.

Although given the larger trend it's likely that such bull move, if it materializes, will likely be very modest. However, a break of this descending bearish channel to the upside would be excellent news though and would likely confirm that $6000 was indeed the bottom.

On the daily time frame, you can clearly see that Bitcoin is having a tough time breaking the $6800 level due to a lack of momentum on the upside to break through that local area of low volume.

Furthermore, the daily Stoch RSI is way overbought and we've started to form this weird head-and-shoulders-y pattern:

Which tells me that we're likely due for a pullback in the next few days with probably more consolidation within the current range:

The question now being: will Bitcoin be able to gather enough momentum to break out of its range through this area of low volume?

Opinion (Not Investment Advice).

That range Bitcoin has been trading in since mid-June is looking quite solid, which in my opinion, has likely discounted the scenario of a break down to $5000 although, as you might guess, is impossible to discount entirely.

As you can see, the volume profile at this level (green/purple indicator on the right-hand side of the image) is looking quite thick and healthy which indicates there is market interest for the current price.

Besides, the current price range is supported by a huge volume well underneath it (zone of thin order book) which has acted as natural support for the price on multiple occasions now.

Breaking down through such volume well would require a lot of selling momentum and, for all its bearishness, Bitcoin hasn't been able to gather such momentum which seems to support the assumption that the market might have actually found a fair value for Bitcoin at $6000 until more fundamental news hit the market.

At this stage, I believe the most likely scenario is more consolidation around $6500 USD going into September and the CBOE decision before the fundamentals decide of a new direction for the market.

Back to you traders, where do you see the price going in the next few weeks?

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Until next time,

FØx.

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If you liked this article, make sure to show some love by up-voting or following yours truly. You can also follow me on Twitter at F0xSociety.

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Trading with volume profile will give you an edge over 99% of traders out there. If you'd like to learn more about it I recommend you visit the Trader of Futures Youtube channel hosted by Ernie Varitimos. Ernie is an experienced trader with a lengthy background in technology which gives him a unique perspective on the market.

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Recommended Exchange:
Coinbase
Decentralized Exchange:
Radar Relay
Kyber Network
Hardware Wallet:
LEDGER NANO S

May the FØx be with you.

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Published on

by FØx

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