Bitcoin and Market Update (July 27 2021)
The week has not closed yet but as long as it does over 32k, the bulls are regaining a bit of strength on the high timeframe with proper deviations beneath. It’s clear so far that any downside deviation below 32k was quickly bought up the same week, which confirms technical strength of this area making it demand zone.
Kind reminder how EXTREMELY OVERSOLD BTCUSD is per trend & momentum. Birbicator on the bottom suggests complete reset of the market unseen since September 2019 (!).
50-week moving average has got proper mean reversion which confirms that the market is not overbought or extended to the top anymore. It’s made enough upside space for a proper bounce. Because it’s a weekly timeframe, it all lasts weeks not hours, which is what confuses most of the new traders expecting immediate effects or TA doesn’t work (lol).
In fact, it’s the first 50-week mean reversion since the covid market crash. It is BULLISH.
To recall my Saturday’s update about the week, It closed in a very bullish manner in my opinion. Breaker Low 28393 was defended and first time since 65k highs the near-length BPRO baseline started curving up. Breaker High 62615 stands still and when broken, new ATH into 90-120k would be coming (imo Q4 2021).
Birbicator’s trend & momentum on the bottom has just confirmed first legit buy signal ever since October 2019. It is an UNPRECEDENTED event which occurred only 2 times before during this market (!!!). Imo this complete market reset by trend, momentum, onchain is what will likely take BTCUSD into new all time highs.
For long term traders, as the momentum & trend has JUST confirmed multi-month reversal, current rates are still considered good buying opportunity – especially accompanied by extreme fear in the market sentiment.
Daily candle closed on Friday inside the local supply a-VWAP + MA50, which I commented over on Saturday to be one of reclaim indicators pushing out BTC higher. After that we’ve seen +20% pump with short squeeze right into 40k region retest. Naturally, as the chart suggests, the next supply cluster is 42.6-44.6k from a-VWAP + MA200, which I personally expect to be attempted in the next days.
From the fundamental/news-driven point of view, I highly suggest everybody pay attention to THIS VERY WEDNESDAY as that is exactly when FED is reported to announce their decision about hiking interest plans for more or less distant future. This will supposedly cause a lot of volatility, VIX increase, options going crazy right before the expiry on 30th of July this Friday. I personally am expecting FED to FUD to bash down the price of gold again, although rather without any concrete plans or decisions different than what we’ve seen so far.
The potential temporary FUD may pump DXY (USD) with another cascade of immediate algo-driven 5-15% sell-offs on commodities, equities AND cryptos. This scenario makes quite a lot of sense in my opinion. The results are expected to be rather temporary to attack the price of gold which may be a threat to FED.
Hence if a short-term trader, I highly suggest you take profits or hedge yourself for Wednesday.
The middaily picture trades still inside the very same range for past 70 days between 30k and 43k and as long as it does, BTCUSD is still vulnerable and likely to see more fakeouts whenever intraday timeframes are overbought or oversold (extremes).
BPRO flashed the buy signal~31500s and ever since I’ve been long on my medium-term holdings.
Breaker High 35088 is key levels to reclaim for bulls, which in case it happens, should lead to volume-based resistance cluster (BVWAP trendlines space) 39.7-42.7k.
If we see a strong monthly/weekly close inside or over the volume based supply, R3 unlocks at 48844.
Breaker Low 31512 confirms that this level must be defended for bulls to be safe.
As given on Saturday, we’re still inside the same MTF 70-day long range between 30k (28.8k) floor base and 43k range highs. Today’s massive short squeeze came as a result of overall extreme fear and disbelief. It’s a large squeeze as many unexperienced retail traders shorted right into the supports of extreme fear area demand zone.
Breaker High 35088 was broken and reclaimed with very solid close through which suggests that after tapping into R1 38543, the next resistances to be expected are R2 42684 and even R3 49374 eventually.
Breaker Low 31514 is the key level to defend by bulls and as long as we see weekly closes over 31.5-32k levels, the medium-term bullish picture is safe as the conditions for 23-24k were NOT met – the concept of 23-24k is invalidated at least for the time being.
In addition to the previous chart, here’s another view presented with the help of BVWAP trendlines acting as resistance. Short-term intraday wise, BTCUSD is overheated and it’s fair to expect some local throwback into 35-36k region.
BVWAP cluster + BWAP 39.4-42.7k is the most essential BPRO based resistance cluster which is confluent with price action range highs region.
It proves that it is not needed per se to reclaim 43k, as the volume based data suggests it’s enough to break / close the day over 42.7k. Early break-through signal comes with 12h or 1D candle closed inside the BVWAP cluster, somewhere between 39.4k and 42.7k
MTF picture updates with beautiful squeeze short candle from 35000s into 39000s (or even 42000s on futures). Beautiful short term crossovers of a-VWAPs and 50MA & 200MA show that 32.6-33.3k is the ultimate short-term support in case of intense FUD coming from FED this Wednesday or options expiry this Friday. For the upside targets, the daily levels given in 1D analysis are to be expected.
Besides, as the MTF range has not resolves yet, it is not suggested to trade the range other than:
1. Buying range lows 28-30k
2. Selling range highs (40-43k)
3. Buying breakout RETEST over 43k
4. Selling breakdown RETEST below 30k
That being said, do avoid using high leverage through the next days-weeks.
Hourly picture shows clearly the momentum is temporarily overbought while the price action seems to be forming a chart pattern – bullish pennant, which usually aims at continuation. Unless any aggressive FUD news, premature announcement from Elon Musk or similar appear, the upside continuation should take BTCUSD into 43k region attempt. Accounting the market overheat intraday, and if missed out on my calls in 29-32k region, the fair reload zones are 36000 or said 32.6-33.3k.
As long as BTCUSD trades/closes the day over Breaker High 36044, the bulls are safe in local uptrend into the next daily supply 42.6-44.6k.
Breaker Low is 30079 which must not be lost on the weekly or daily timeframe.
The ratio at 0.45s after todays short squeeze shows that the price of bitcoin pushed higher than NUPL. The highs of 30th of June were broken by price but not by NUPL, which may suggest that there’s tiny bit of bullish divergence where NUPL is lagging element. If any, it would more suggest upside continuation although as long as BTCUSD trades inside the 30-43k MTF range, any uptrend is still going to be vulnerable and not fully backed.
Naturally, I still believe the top is NOT in and we see new ATHs in Q4 in 9-120k region or higher. That’s where I’d expect NUPL to peak over 0.75 ration which historically has always brought bear markets or semi bear markets. I expect nothing different this time.
Currently at 26 points inside the fear territory, outside extreme fear. If long term traders or MTF swing traders, I’d load BTCUSD on the dips as long as we keep seeing the fear or extreme fear. 70-day long and counts. The longest extreme fear period in recorded history of the index.
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