Daily Report – Bitcoin and Market Update (April 20 2022)
The middaily chart shows consecutive higher close when compared with the daily close after bouncing off of the $38500 lows.
The CTF Trailer, one of the main BPRO indicators, implies that the bears are still in control of the market, as long as the Stop invalidation level at $42405 remains unbroken.
After spotting a strong bullish divergence marked with 82% strength note, bitcoin has reversed to the upside for a short moment, so far.
Having broken above the orange box representing the BWAP, the 40000-40500 USD zone should play the role of support for now, whenever bitcoin retraces into this region.
The first successful 12h close over 42405 USD level adds to the bullish odds, as the bulls would re-gain the control over the market, increasing chances for a follow-through to the upside.
The MTF chart shows a short-term bullish thesis after bottoming out in the mid $38000s.
The CTF Trailer has flipped into bullish mode after break above 40000 USD level. Now the CTF Trailer Stop points at $40153 as the main invalidation level, if closed below which bitcoin would lose the short-term bullish thesis.
The invalidation level aligns with the main Level Lines support. This additional backup implies greater significance to the area and higher chances that if lost there could be a stronger move to the downside expected.
Furthermore, BPRO Level Lines show resistances at:
Meanwhile, BPRO Level Lines show supports at:
These levels could be anticipated to serve as level-to-level references. In other words, when one level is breached, the next one in the direction of the movement
The hourly chart shows a short-term consolidation period within a narrow range-bound movement.
The range continues to move inside the $41200-41800 territory while rejecting the upper half of the range with upper-wicked candlesticks.
There appears to be a short-term demand layer within the very mid-range area and it adds significance to maintaining this area for the further price increase.
Otherwise, if bitcoin breaks below the Wave Pivot based support at $41100 the chances are that the downwards movement continues lower into the mid 39000s USD or even lower – towards $38800.
A successful break above the $42000 resistance implies underlying strength and enough of momentum reserves to pursue higher price targets, even above $46000.
The main premise to the contrary opinion investing remains that the crowds are always wrong at the extremes due to their perception biases – cognitive biases, or mainly – emotional biases, e.g. loss aversion bias, sunk cost bias which make them act irrationally.
As the history learns, every time in the recent years bitcoin went to the depths of extreme fear on the sentiment side, the price of bitcoin generated positive returns soon after. While there is no fixed rule for how long it takes bitcoin to form a reversal pattern, my experience suggests to me that very pessimistic expectations of the mobs have generated some of the best purchasing opportunities, and vice versa.
Now, that the index stays flat around 20-30 points on the scale, I would argue selling and running away from the market may not be the most profitable option at this time. Instead, I would focus more on searching for buying opportunities.
Of course, the past is not a guarantee of future performance, yet it definitely can teach us lessons. One of such is that it pays off to counter trade extremely optimistic euphoria, as well as extremely pessimistic depressive stage of investors’ sentiment, which in my opinion is the case right now.
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