Bitcoin and Market Update (September 19 2022)
The weekly chart seems to be continuing to reject the 200-week average ~ 23405 USD.
At 0.75, the 7-week correlation coefficient displays strong directional connection between the BTC and the SPX prices.
With the 50-week mean declining at 37243 USD, the yearly downtrend proceeds.
Meanwhile, the June’s lows have not been broken just yet – instead, BTC trades within a sideways pattern between the 17.5k and 25k USD levels. As long as it does, there is no clear direction of the market – except for the primary downwards trend.
The middaily chart shows, yet again, the downwards advantage presented by the BPRO trends.
The CTF Trailer is on the bearish note after failing below the 20500 USD support last week.
For now, the main resistance is at 20900 USD. As long as this level is not broken and reclaimed by the bulls, the Bitcoin price may continue to build the bearish sentiment within the larger sideways environment lasting since the June’s bottom.
Provided that a larger breakout with follow-through comes up, outside 25k USD ro 17.5k USD, BTC may extend the move in the breakout direction by the base size of 7.5k USD – based on the measured rule.
Technically, the bottom breakout target is at 10k USD, while the upwards breakout target is at 32.5k USD.
The MTF chart displays an instance of a valid breakout, reaching outside the regular volatility frames.
The BPRO Low Band has been broken down with a follow-through, as three consecutive bars closed below the Low support.
This increases the chances for the breakout to be valid, and backed by the volatility developing in the downwards direction. This may also imply, that any short-term bounce to happen within the next days can be considered less credible and rather short-lived.
As for now, Bitcoin prices are projected to swing between the 21000 USD resistance, and the 18500 USD support.
Overall, because of the valid downwards breakout, BTC may be expected to keep putting in new lows more likely than new highs.
The hourly chart seems to be showing the two actual support / resistance lines that matter the most for the local price action pattern.
With a breakout failure on top over 22200 USD, and the break failure on the bottom at 18540 USD, it seems that BTC has the chances to continue to swing back and forth within the mentioned boundaries.
Failed patterns tend to perform better in the opposite direction. For that, the short-term upwards price action may come true – provided that there is no fundamental shift in the global markets.
Traders must be exceptionally cautious this week, due to the upcoming FOMC meeting, which can generate a lot of unpredictability, risks, and volatility.
At 21 points on the fear and greed index scale, out of 100, BTC seems to be getting deeper and deeper into the extreme fear.
The lower the index prints, the closer to the potential bottom it typically gets.
While it is not a timing indicator, the sentiment should be used barely as a barometer to measure the human reaction to what traders observe in the price chart.
The more of the fear the market induces, the more loss averse the traders get, the more they will hold on tight to their underwater positions, and the more representativeness bias they will experience – anticipating even lower targets. This intensifies the most right at the selling climax – where the market reverses.
Significant index spikes may back up reversal patterns in the price. Hence, it should be monitored.
Hope it helps.
P.S. Unlock more insights with premium access at -20% discount combined when crypto payment.