Daily Report – Bitcoin and Market Update (August 2 2021)
HTF 1M:
Monthly candle closed as a bullish hammer confirming that 28.8-35k region was reclaimed by bulls on major picture. Currently from the monthly perspective, there are 4 essential levels that should come into play for August and rest of Q3: 24.8k, 35k, 47k, 58.3k.
The monthly support region 28.8-35k must not be reclaimed by bears in order for bulls to continue higher. In other words, August’s candle should not close below 35k. Otherwise, it enhances the risk of losing the major support and potential flash crash (only if FUD empowered news comes out though to support any unexpected bearish thesis) into 24.8k support provided by 20-month average (gray curve).
Intramonth resistance for August is at 47k, which is perfect bottom low of April’s ATH candle. Key pre-breaker support that once broken resulted in abnormal selloff to 28.8k. Based on the polarity change principle, the broken support turns into resistance.
If we see a weekly/monthly close over 47k, the next major HTF level is 58.3k. Whenever that level is broken through with a weekly/monthly close over that level, BTCUSD would likely rally into 90-120k region not long after imo.
I’m personally expecting August to show off retest of 47k pre-breaker resistance with high chances of visiting higher into mid 50000s region (potential intramonth overthrows near 58.3k area with short-term reversals after). We’re in local HTF range between 65k high and 28.8k low, so technically speaking any price action occurring inside this range is neutral for next 2-3 months/leaning bullish for next 6 months (consolidation in massive bull market). Whenever any FUD crash news arrive, expect dips slightly below 35k but Id consider that buying opportunity for those who missed out on rally since all BPRO buy signals came in at 29.6-31.6k region.
HTF 1W:
The weekly candle closed through local BWAP dotted resistance which shows off bitcoins strength and aiming higher, potentially to retest weekly pre-breaker at 52.9k.
The trend and momentum per Birbicator on the bottom of the chart, after perfect & complete reset to the levels unseen since bitcoins disbelief and $3000-6000 levels, come with confirmed reversal which IMO has reloaded enough upside potential, to break into new all time highs in the coming months. This looks as if it was the last chance to get bitcoin cheap during this bull market 2018-2021. TK histogram to also provide bullish crossover through the neutral “zero” level.
BPRO suggests that weekly levels to watch are: 36272, 40169, 46464 and ultimate Breaker High 62615 that once broken should lead to new ATH.
Breaker Low 28393 must not be broken otherwise closing a week/month below opens the risk of visiting into 24.8k area. Since we’ve just seen probable upside break through candle, it’s not yet full of bullish momentum so it’s worth having some cash on side just in case.
In other words, unless unexpected FUD news comes from FED, Elon, China, etc. I’d expect BTCUSD to go for 47k and 52.9k retest this month.
HTF 1D:
The daily closed with local rejection of aVWAP+MA200 resistance cluster 42.6-44.6k after seeing a strong close outside the range highs first time in 70+ days. It confirms to me that the range highs is rather a territory/area than a straight horizontal level. It is a sideways “trend” or a movement, which despite strong daily close outside the range highs (but still within the range highs territory), still shows lack of bullish momentum and a lot of uncertainty.
In case of a FUD news, there’s very decent support (aVWAP + MA50 cluster) 35-36.5k which should work as a decent reload zone for those who missed out on previous low 30k entries.
Daily or weekly close INSIDE the rejected region of 42.6-44.6k will show strength where it’s shown weakness before, which would be bullish signal of weakness of bears.
Weekly close over 44.6k brings high chances of visiting the third arrow resistance cluster 53-58k.
For the next days, I’d expect bitcoin to consolidate inside 36.5k-42.6k range.
HTF 12H:
BTCUSD on the middaily chart has been inside the very VWAP based resistance cluster / supply zone 40-42k. Local baseline mean support at 36.6k aligns with Breaker High level which confirms the technical significance of this level – must not be lost so that bulls continue higher. It may see intraday spikes below but as long as it closes 12h/1d candles above 36.6k, bitcoin bulls are safe.
Breaker Low 31514 must be defended at every cost. Otherwise, bulls are at risk of losing it for 24000s retest. I don’t think its probable at all but with Elons tweeting skills, its best to be prepared for the worst and hope for the best.
Close the day back over 40.7k and the next resistances unlock at R1 44330, R2 49093 and R3 56787.
MTF 4H:
MTF picture suggests as well it is possible (but not mandatory) to see the downside oriented price action towards volatility & momentum based demand zone 36-37k, which is additionally confirmed by price action (range lows of 27th of July at 36k).
Locally It is still in local uptrend yet its not fast upsloping anymore. The most recent vertical short squeeze has led to low momentum uptrend which is not yet the most convincing. The bulls seem to be “scared” despite they’ve got advantage over completely liquidated bears shorting into 30-32k region through the last weeks.
Two possibilities I consider probable scenarios are:
- Rapid short squeeze scenario – 39k lows defended; current setup of low momentum uptrend after previous squeeze reminds me 6-8k short squeeze from April-May 2020. It is likely due to weekly timeframe being completely undervalued and oversold with confirmed bullish reversal. Short squeeze leads to 44.6k-47k region target.
- Broadening consolidation scenario – flash intraday drops to low 36k support cluster with lows bought back very quickly. Bit more ranging for the rest of the week inside 36-42k trading bound with base size of 6k and potential upside breakout target at 47-48k.
BPRO suggests Breaker High 42701 is key to close the day above to confirm the upside 75day range breakout. If that happens, then R1 51656 is next. Breaking below 33726 may lead to Breaker Low 30354 which enhances the risks of visiting sub 25k area (imo not much likely)
LTF 1H:
Hourly picture shows a potential 36.3-42.6k range in case the orange support block 38.8-39.2k is broken with an ugly candle below / raindrop with fat “belly” below 38.8k. Series of fakeouts on subsequent tops locally shows off similar mechanism to what we saw in March-May 2021 topping process. It would make technical sense to visit range lows, perhaps overthrows to trap over leveraged bulls and late bears right after on futures.
Losing the orange area is an early warning signal of potential 36.3k retest, which would make bears complacent again – you’d start hearing back about $10k targets, which is obviously complete nonsense.
As long as the orange block is defended, Id expect BTCUSD to retest range highs at 41k or 42k.
NUPL
The ratio is currently at 0.5 which still classifies it back in belief territory. Im personally expecting NUPL to stay within the belief zone 0.5-0.75 for August-September unless unpredicted, unexpected black swan event comes.
Historically, all key market tops came with NUPL significantly over 0.75. It hasnt happened during this bull market so far. When it happens, this is an ultimate indicator for me to scale out of the market aggressively into other markets: hard assets, commodities, real estate & REITs, mix of commodity rich currencies (AUD, NZD, CAD).
The plan is to have the criteria above met within the next 6 months.
Bitcoin: Number of Active Addresses (7d Moving Average)
Since my Saturday’s onchain update, not much has changed. Therefore, everything I wrote then applies still very well. Here is to remind you:
“As glassnode explains, it stands for the number of unique addresses that were active in the network either as a sender or receiver. Only addresses that were active in successful transactions are counted.
As the chart presents, there is certain growth lag on the onchains side versus technical price of bitcoin. It suggests to me that bitcoins price has been going up sharply and it’s not even backed by onchain yet. When price is moving up fast but the indicator barely moves, it may suggest about the bigger upside growth potential.
The full potential would come when new people would start joining in to FOMO and push bitcoins price higher. Id expect that to be the case after BTCUSD reclaims 45k – it’s 200-day mean price.
Normally, this tiny divergence described could mean a markets weakness. Here though, I read that more as disbelief 2.0 stage of the market as after severe crash, and fading every pump since 32k by retails getting liquidated counter trading 31.6k massive buy signal from BirbicatorPRO.”
FEAR/GREED INDEX
Currently at 48 points it is in the neutral territory after 3 months of extreme fear unseen before even during 2018 bear market depths.
It seems there are high chances that if we see the next FEAR/GREED decline into extreme fear below 25 points on the scale, THIS would be likely the mentioned bearish complacency and hence perfect buying opportunity – probably at low 36000s if we get it.
Positive sign, though, is that first time in 70+ days of extreme fear ranging we’ve seen an upside spike showing that bears realized they shorted the bottomish area and got proved wrong because of that.
Whenever FEAR/GREED scale notes >80 values again, it would be perfect time to take some profits. More info available as always only for exclusive subscribers and free trial members of The Birb Nest in my video report. Remember that if you still haven’t used our lowered prices to prolong/renew/purchase your exclusive access, you can still do it on our website with the link attached below.
