Daily Report – Bitcoin and Market Update (August 16 2021)

HTF 1W:

Weekly sessions have been following so far the expected path after getting perfect bounce off the 50-week average and complete trend reset/mean reversion. Momentum of the trend seems to be half way through, which usually signals that the opposite extreme is expected to be coming.

Personally I expect the 4th wave to unfold into more complex pattern than regular ABC and rather to form a form of a coil / symmetrical triangle. It would make more sense to continue going flat throughout the rest of the Q3 and into early Q4. That’s the regular seasonality effect that BTCUSD tends to follow.

From the price action point of view, it doesn’t matter much for what kind of a chart pattern it forms to complete a wave 4 of Elliot Waves for this bull market, because neither uptrend nor downtrend is bound to continue as long as its trapped inside the extreme highs of the range – sub 30k lows and 65k ATH. Any price action occurring inside this territory is considered neutral from the price action viewpoint.

Trend analysis would rather suggest an upward continuation after a strong impulse of wave 3 from March 2020 covid crash lows. Any chart pattern in an uptrend is more likely to be followed by the prior trend continuation – upwards in this case.

While applying here very basic rules of EW, performing analysis other than technical also suggests similar directions and targets. Projected targets make sense to come somewhere between 90k and 120k, which is the exact topping area given by me months ago.

As long as bitcoin trades and keeps closing weeks over MA50, the uptrend is safe from the long term perspective.

HTF 1D:

The daily chart is right over the old supply zone of aVWAP & MA200. Mean reversion of the medium timeframe is complete. Will long timeframe mean reversion get completed in the current series? Let’s have a look.

Based on the polarity change principle, the broken resistance (areas) turn into new support (areas). For this reason, we should expect 37.5-40k to act as a strong support zone in case the first support block 42.3-45.5k is lost, which is more essential for the short-term analysis.

I still expect 53-58k supply zone to be retested, which is suggested by Volume Profile analysis. It also does make a lot of sense to show off some final attempt to approach 50k resistance where it’s expected to be rejected at first.

For said reasons, one may expect a proper MTF range 30-43k breakout RETEST to occur in the following days. Rarely ever bitcoin shows enough strength not to print any breakout retest with local rounded bottom – unless it’s a violent uptrend expansion outside ATH territory. As long as its trapped between 30-65k long term range (Wave 4 range), bulls are NOT at their full force just yet.

While I could see BTCUSD throwing back the price somewhere between 42.3k and 45.5k (support block 1), I would only expect support block 2 to be tested in case of an unexpected black swan event or a FUD news from China, Elon or FED. Other than this, support block 1 should be defended by bulls.

In a wrap, 53-58k is rather matter of time imo and the question is if it’s shot straight up from here or with the local throwback into 42-45k zone in between.

Let’s keep digging deeper to find out.

HTF 12H:

While testing around the new version of BirbicatorPRO, one can discover the volatility based target projections showing that the highest chances are for bitcoin to trade between 39.5k and 54k in the upcoming weeks. It is out of question that the past few weeks have been dominated by bulls all the way leaving bears with dust to eat and starve. On the other hand, one can read a potential bearish divergence which may be signaling early symptoms of trend weakening. Current low momentum movement may turn into a HIDDEN bullish divergence marking a continuation to follow, provided that local oscillator downtrend line is broken through (bottom red arrow). If that is the case, then from the technical standpoint, the potential regular bearish divergence turns into a factual hidden bullish divergence warning about upside continuation and final push into 50k area retest. Either case it unfolds, one should take warning remarks with suggestions to take AT LEAST partial profits after this very massive run up. It’s the right thing to do, especially if you’re low or medium timeframe trader.

MTF 4H:

MTF chart seems to be confirming that BTCUSD is locally at a twisty edge where the larger decision is being made. It’s crawling in a low momentum, rising wedge type of a pattern and hovering right over two short term demand zones marked with black arrows: 38.8-40.1k and 44.4-46k.

Mean trend analysis points out that in case of a wedge breakdown with support 44.4k being lost, there’s high chance to give the 38.8-40.1k retest.

I would not be getting bearish here just yet for sure for short term (long-term Im bull with targets $100k+ – remember that I added ~400k usd worth of BTC longs on the recent 29.6k capitulation). For clear TP/short (although I don’t recommend shorts right at the 5th wave starting) I’d wait for clean 44.4k breakdown with daily close below. Until it happens, low to mid 50000s are on the table in my opinion.

LTF 1H:

Low timeframe analysis reveals the confirmation for the already mentioned targets, levels and zones. Once 46k floor is lost, 44.4k is the next solid base. As long as this cluster is defended successfully by bulls, 46.7-47k cluster should be retested with high chances of an upside breakout. If that’s the case, then 48k highs and 50000s are to be expected.

If 44.4k is lost, then another -10-15% decline may follow. Anyway, it is worth booking some short-term profits for sure, just in case local unexpected flash crash comes in. Several low timeframe warnings have appeared.

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FEAR/GREED INDEX

After most recent sub 30k capitulation, we have seen gradual confidence being rebuild on the crowds side.

Crowds are always right in the middle of trends, but always wrong at the extreme.

Knowing that we’re not at full extreme greed / euphoria stage of the local leg up, it does seem that there’s more upside room left to grow for bitcoin.

The higher up the scale it goes, the stronger signal it becomes to book profits while you still can.

The same people who sold the bottom expecting to see 10k or 20k usd BTCUSD prices, the very same people are going to get bullish at the very peak, contributing to local euphoria.

Overall, comparing 80day+ extreme fear and 30-43k range with 20-25 days or steady confidence growth, I read it more as a first relief sign rather than trend expiry in general.

NUPL

Casual reminder that Net Unrealized Profit/Loss is the difference between Relative Unrealized Profit and Relative Unrealized Loss. This metric can also be calculated by subtracting realised cap from market cap, and dividing the result by the market cap.

Currently NUPL is slightly over 0.57 ratio which suggests smooth belief on the market. There’s been 62% increase of the NUPL ratio value showing how rapidly the unrealized profit (whales liquidity pool to dump on you) grows. If you scroll back through my past reports of recent weeks/months, you’d notice that I’ve been comparing current NUPL pattern to be similar to the one of June-November 2017 before the final leg up of the 2015-2017 bull market arrived after few-month consolidation.

I expect similar story to be told throughout the next few months. If you want to be part of the story as an active trader or need help to cut losses and start winning, it’s still not too late to join ultimate army of exclusive members to guide you through ups and downs

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