Daily Report – Bitcoin and Market Update (April 27 2022)
The middaily chart recorded another violent rejection off the 40000 USD highs, locally. What does it mean?
Firstly, the price action analysis implies the lower high and the lower low were achieved recently, and so far the reaction off the 37700 USD lows has been rather weak.
Secondly, the divergence system has signaled another divergence instance of 73% strength, which has extended the prior divergence starting mid April. Such a combination may suggest a weakening to the said divergence as the strength has declined. However, the divergence is still apparent and relevant for noting the market is over extended to the downside, or that the downwards trend is exhausted.
Moreover, the CTF Trailer continues downwards with the Stop invalidation level at $41684. If bulls manage to reclaim this level with a daily or weekly close through, this could be a signal that they take the lead over the market. Otherwise, the bears remain in control and have the upper vote in the market now with, potentially, lower price targets to come.
The MTF chart shows the amount of noise seen in the price action of bitcoin.
It can be noted based on the number of opposite CTF Trailer “signals” indicating the shift in the market force, or equilibrium tilt toward the bulls or the bears. If the market moves in sideways, quite often it would move back and forth, triggering both bullish and bearish alerts on both sides of the movement.
For now, the CTF Trailer Stop remains at $40315, which is the main level to reclaim by the bulls, in order to re-gain the control over the market. Until that happens, the bears are in control, putting the bulls in danger of the prices falling lower.
The main support is defined by the BPRO at $38061. As long as bitcoin keeps closing sessions over that level, the support is valid and firm.
Furthermore, BPRO Level Lines show resistances 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 overlays the BPRO Momentum Bands, as well as the CTF Trailer trend.
The Momentum Bands are based on the historical volatility and standard deviations. It suggests that the current area of interest in terms of volatility for bitcoin is the range 37.3-40k USD. As long as bitcoin continues to move between those boundaries, it’s not expected to return any trend or persistence in either direction. Only a break out of the bands in either direction could practically form a trend and cause the money to move in the breakout direction.
The CTF Trailer favors the bears until the Stop $39328 is reclaimed by the bulls. Unless that happens, bitcoin is in danger of short-term declines into the 37300 USD support, or lower.
The fear period of extreme pessimism continues.
Now, at 21 points on the scale it’s deepened the bearish expectations from the small speculators.
As the behavioral principles remain the same, the contrarian investors may search for profitable buying opportunities when the crowd is extremely bearish, as the crowds are always wrong at anticipating the extremes.
With the index not being a timing indicator, it does not project or aim predict perfect tops or bottoms. Instead, it returns information for when an asset is considered cheap or expensive.
For now, bitcoin is relatively cheap and promoting buying more than selling, the way I see it, which does not mean it is forbidden to go any lower.
Caution is advised.
More details in my premium video report. God bless
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