Daily Report – Bitcoin and Market Update (August 03 2022)

HTF 12H:

The middaily chart has sown a tweezer bottom pattner, showing two lines of almost the same range, and almost equal bottom prices.

So far, there has been an early approval pre-market – before the equities open up. As the daily open has a high chance of becoming the very day high, or a low, a lot may happen until the market open. However, the follow-through freshly has appeared right after the 12H session closed off for BTC.

The CTF Trailer remains intact on indicating the bullish odds, as the Stop $22265 has been well defended so far. As long as it is, the bulls remain in charge with a background to develop a larger trend within.

If the 22265 USD level holds on the daily time frame – required a close above – then the BTC traders may expect more upside to come.

Especially, if the rally is backed by the equities advance.

MTF 4H:

The MTF chart displays that BTC price has broken out to the upside, over the descending trend line resistance.

Price action wise, such an upwards break is bullish on its own. Especially, if confirmed also by a successful and rounded retest.

However, the CTF Trailer remains on the bearish note, for the short term. The CTF Stop at $23636 is a local resistance, that needs to be breached, in order to validate the upside breakout. Until that happens, BTC may be a subject to invalidation of the setup, no sooner than the 12H session closes below the trend line support at 23000 USD.

Arguably, the range highs area of the consolidation pattern following the market bottom at 17500 USD may be a valid territory for a bearish rejection. If there is a follow-through to the upside, BTC may surge higher.

LTF 1H:

The hourly chart shows a more detailed look into the trend line break up.

While the breakout may have bullish implications, traders should not forget that the dominant trend (bear market, 200-day mean) is downwards, and medium-term trend has barely curved up, to back up the bear market rally. This suggests that any rally within the next sessions may be rather short-lived, and easily reversible. Traders should not take it for granted.

Once the major resistance zone is breached at 24000-25000 USD, the short-term bulls may feel a bit more confident in the upwards market directions.

Until that happens, the bulls are in danger, even though they may be in charge, for now.

FEAR/GREED INDEX:

Now, that the sentiment has leveled up, it’s still impossible to perfectly time the market entries with the sentiment indicators alone.

Ever since the index improved from 6 points, to the current 34 points, there seems to be more determination to pursue higher price objectives, as congitive dissonance builds up within traders’ minds. The reversal and the bear market rally may result in conflicting views to many traders, who would hold on to their short-selling losses due to their loss aversion or a prospect theory. This, paradoxically, may occur to be trend promoting.

A wise saying suggests traders should not fight the trend.

Bitcoin: Net Unrealized Profit/Loss (NUPL)

From the on-chain standpoint, BTC holds above its breakeven levels.

At the 0.051 ratio, the NUPL ratio is now moving sideways, locally.

While the history does not repeat, it often rhymes. That is why, the lower the NUPL prints reach, the better the buying opportunity for the contrarian investors.

Despite it may not generate immediate impact, the patience of traders counter trading the extreme fear will likely be rewarded, sooner than later.

Hope it helps. God bless.

P.S.
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