Good morning, traders. Price hit the red target yesterday and was $20 shy of the pink target. Other than that, it has continued to move sideways within a possible flag. However, generally, the longer this is drawn out the less bullish it is. That being said, there was a 9% drop in Bitfinex short interest in just over an hour earlier this morning prior to the U.S. open (most of it happened within 20 minutes suggesting that it was possibly a single entity unwinding). There was a simultaneous 3% drop in Bitfinex long interest (most of it happened within 5 minutes suggesting a single entity). In terms of actual numbers, shorts closed out about 2500 positions while longs closed out only 1000, causing the longs/shorts ratio to pop. There was no corresponding strong movement in price in either direction at the time but price has been moving up gradually since then. Generally, a significant drop in short interest like this means that price is expected to rise. The lesser the short pressure the easier it is for price to do so. Why did it happen this morning? We can only speculate, but there is the possibility that because the bears have not been able to push price back down, in spite of the dumps since the February 8th advance, larger position holders are cautious that price may advance more in the short term.
There are a few people running around talking about a possible IHS on the H4. I have labeled it for you, but I'm not necessarily a fan of the idea. If it is, then there is the possibility that we could see a move down to $3500 before completion of the right shoulder. The neckline is denoted by the ascending red resistance line. If you've been following me for any length of time, you know that I am not a big fan of H&S or IHS patterns, but in this case volume has been expanding in what would be the right shoulder (as we expect in this pattern) which means we can't automatically discount it. Price is finding support around the 21 EMA, at the bottom of the local TR. I have readjusted the descending channel/flag to compensate for yesterday's spike in price and the target based on the height of the channel/descending wedge would be around the neckline of the proposed IHS. RSI continues to print a descending wedge and has found support, so far, as the previous symmetrical triangle's resistance. Price is also printing a possible ascending channel which should have traders cautious about a possible double top forming around $3700.
D1 shows yesterday's increasing volume resulting in a long-legged doji, just below the daily pivot, underscoring the strength of the current battle between bulls and bears at the $3500-$3700 level. Today's candle is currently signalling more of the same. We can see rising volume since mid-January but less follow through from the bears. Does this signal a shift in sentiment and a reversal of price? We can't tell yet, but it is something that all traders should be watching. High levels of effort resulting in less result often indicate that reversal, and that's currently what we are seeing. Yes, ultimately volume is still decreasing, but at a much slower rate than it has been, hence the need to watch the current volume advancement for follow through and continued increase.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
There are a few people running around talking about a possible IHS on the H4. I have labeled it for you, but I'm not necessarily a fan of the idea. If it is, then there is the possibility that we could see a move down to $3500 before completion of the right shoulder. The neckline is denoted by the ascending red resistance line. If you've been following me for any length of time, you know that I am not a big fan of H&S or IHS patterns, but in this case volume has been expanding in what would be the right shoulder (as we expect in this pattern) which means we can't automatically discount it. Price is finding support around the 21 EMA, at the bottom of the local TR. I have readjusted the descending channel/flag to compensate for yesterday's spike in price and the target based on the height of the channel/descending wedge would be around the neckline of the proposed IHS. RSI continues to print a descending wedge and has found support, so far, as the previous symmetrical triangle's resistance. Price is also printing a possible ascending channel which should have traders cautious about a possible double top forming around $3700.
D1 shows yesterday's increasing volume resulting in a long-legged doji, just below the daily pivot, underscoring the strength of the current battle between bulls and bears at the $3500-$3700 level. Today's candle is currently signalling more of the same. We can see rising volume since mid-January but less follow through from the bears. Does this signal a shift in sentiment and a reversal of price? We can't tell yet, but it is something that all traders should be watching. High levels of effort resulting in less result often indicate that reversal, and that's currently what we are seeing. Yes, ultimately volume is still decreasing, but at a much slower rate than it has been, hence the need to watch the current volume advancement for follow through and continued increase.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.