Daily Report – Bitcoin and Market Update (August 17 2022)
The middaily chart has just displayed an attempt of a wedge support breakdown!
As the overthrows on top populate, the mean-reverting tendencies seem to be gaining on strength. It does not promise, per se, any specific direction of the breakout. However, top failures tend to be followed by more spectacular and violent sell-offs.
A potential wedge breakout objective may be as low as 20-20.5k USD territory.
As long as the CTF Trailer Stop is maintained at $23164, the bulls continue to hold the upper hand and decide about the medium-term market directions.
A failure to hold the CTF support line may align with a wedge breakout, and both effects combined may bring a more violent decline.
The MTF chart gives a closer look into the wedge pattern situation.
As BTC attempts to break below the key ascending trend line support, traders must remember that only a closed session allows for any breakout conclusions.
The CTF Trailer has flipped back to the bearish note, as the short-term bears have regained the control over the market. For now, the bears have the upper hand, until a break and close over 24325 USD level appears.
Overall, the slow, upsloping price trend with a lack of follow-through on tops suggests that BTC is rather within a corrective tide than an actual strong trend – at least, based on Elliot Wave Theory Principles.
Knowing that BTC has been lagging severely behind other risk-on assets, and continuously underperforming large cap equities, it may happen that the actual BTC bear market rally continuation may be cancelled, prematurely.
The hourly chart has displayed an instance of a short-term breakdown, below the main support area of 23700 USD.
Ever since, BTC has now fallen closer to the invalidation point of a medium-term upwards rally. Provided that the daily candle closes below 23164 USD level, the short-term bears may gain on the selling strength and momentum.
However, short-term charts include much more noise and random walks, than trends seen on higher time frames. For this reason, traders should add more weight to the daily signals and confirmations, than to the hourly breakouts.
The sentiment seems to be relatively stable, despite local fluctuations.
As the prices move a bit lower for Bitcoin spot buys, the sentiment seems to decrease, accordingly.
However, there still seems to be much more conviction about BTC going up, than when compared with June’s records.
As explained before, underinformed herds of investors tend to be “right” in the middle of trends, as they can be compared to the river stream flowing in a certain direction. When a lot of money moves in one direction, pushed by demand or supply present in the market, the momentum principle implies that the trajectory of the movement should be sustained – until it meets enough of the opposing forces as market gets overbought, or oversold.
Here, BTC seems to have not yet unveiled its full upwards potential, whereas the current price action adds to the selling pressure as the wedge pattern attempts a breakdown.
For this, the short-term disruption and a correction may be pending, while the upwards breakouts are yet to be confirmed.
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That’s all for now. Hope it helps. God bless.