Daily Report – Bitcoin and Market Update (August 15 2022)

By Cryptobirb

HTF 1W:

The weekly chart has closed yet another session over the 200-week average, adding a bit to the bullish side of the market, within a longer-term picture.

The correlation coefficient has increased even more, toward 0.97 ratio, against the S&P 500 prices. This strengthens the directional connection between the large cap equities, and BTC. As long as there’s an upwards tendency in the stock market prices, BTC gains better chances for moving upwards, to catch up with the stocks.

With the main resistance area at 28-30k USD, BTC is yet to prove its stronger leg-up to this bear market. However, the stocks already bring minor signs of trend exhaustion and overbought conditions. Unless BTC blasts through the 30k USD area, and follows through higher at full speed, it may be subject to a large bull trap, followed by a set of new low targets.

Besides, the 5-week RRG chart displays a decent improvement on the relative JdK momentum side. However, BTC has been the biggest underperformer against the stocks over the last weeks. It has a lot to catch up, until it unveils its full bull potential. But, until that comes to realize, it may happen that stocks will have already finished off their rallies.

Caution is recommended.

HTF 12H:

The middaily chart continues to print sessions over the main bullish threshold.

As long as the CTF Trailer maintains the positive tone, BTC may have better odds for continuing the already-existing trend – an upwards trajectory. It is a valid concept, unless BTC fails to hold the Stop level at $23164. A clean breakdown below that level may accelerate a rapid sell-off.

Local failures populating at the range highs area signifies the setup for a potential twist, and a more aggressive swing failure, eventually. Of course, it needs certain confirmation proof – at least, a close below 23164 USD, but the more overthrows populate on top, the more the distribution setup it becomes.

It sets up chances for a mean-reverting move to the downside – potentially, as low as 20k USD, or lower.

So far, though, the bulls hold the upper vote and aim for higher prices.

MTF 4H:

The MTF chart viewed from the standpoint of the BPRO Momentum Bands, happens to have BTC prices moving within a sideways-themed movement.

Ever since bottoming out at 17500 USD level, BTC has not printed a valid breakout signal according to the Momentum Bands. It is, because there have not been any major up-thrust through the upper Band, or a down-thrust through the Low Band. This brings the lack of a breakout validation, as most of the fakeouts occur within regular volatility frames. Such breakouts can not be considered valid, or reliable.

Moreover, the BPRO Level Lines show a resistance at 24995 USD.

At the same time, the Level Lines display support levels as defined below:

23304
22849
21988
20194

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 can be expected to act as the next “magnet”.

LTF 1H:

The hourly chart has displayed yet another instance of an overthrow, on top.

After over shooting 25200 USD level, having displayed the BPRO Divergence System alert for the bearish divergence, BTC may be a subject to a more violent mean reversion to the downside.

While it’s not granted or should be taken for granted, the lack of a technical follow-through leaves a lot of space for a move in the opposite direction than the failed breakout itself.

Locally, BTC is moving sideways within a narrow range-type of a movement between 23500 USD, and 25200 USD area. As long as there is no valid breakout in either direction – backed by a rapid volatility spike – BTC may bulls may be in danger.

FEAR/GREED INDEX:

As the sentiment proves a bit of stagnancy in the higher end of the fear territory, there seems to be a bit more maturing in the process after many investors have realized their cognitive dissonance effects.

Typically, when a trader records a view or a market trend conflicting their own opinions over the matter, they tend to reject or ignore it to avoid mental discomfort. This takes time to unfold and process. After a cool-off period, traders tend to start realizing about their prior mistakes and attempts to join on the short selling wagon as the market reached the trough areas. This often leaves them wishing for the market to go back lower, so they can benefit from such.

Here – it seems to be a more mature setup, where the crowds are right in the middle of the trend. Counter trading larger money moving in a certain direction rarely ever pays out profitably.

It seems that the sentiment supports the current BTC prices setup, potentially backing up a bit more rally left in the fuel storage.

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God bless.