Daily Report – Bitcoin and Market Update (August 24 2020)
Weekly picture reminds me a lot of April 2019 and short-term reaccumulation after a strong upside surge. Weekly is clearly proving with momentum, that there is consolidation going on – divergence between Stochastic that crossed bearish and declines for a moment and TK momentum histogram advancing after bullish crossing over the neutral “0 level”. Price action wise, bitcoin established Higher High and is showing significant strength at the levels which were way weaker back in May-August 2019 period. This proves that technically, bitcoin matured enough to proceed with upside expansion, most likely beyond prior highs of 2019 14k. Reaccumulation/consolidation given by momentum also means that oscillations between 10000 and 12000 are acceptable – worth having some bids left at lower prices of this range. Even tiny short-term candle breaking the resistance of the orange-marked rising wedge type of structure, will cause cascade liquidations of over leveraged shorts and cause a short squeeze that should push bitcoin up exponentially.
Daily volume by price profile is showing most important support levels to be 11700, 11150 and 9500. These are the levels that were traded with the biggest volume spikes, hence naturally are considered hugely important to traders – lots of positions closed/liquidated/stopped. The bullish bastion at 10500 should better be held, otherwise it may fill the 9600 CME breakaway gap in case of some fundamental, news-driven FUD. Other than that, daily is looking quite strong in the 11000-12000 area, which brings high chances BTC is going to flip these levels as a new support/demand zone on a larger time scale adding to the importance in future. For most bullish conditions, bitcoin would need to see (what is quite likely) strong 1-2k buying candle in the next weeks. This would liquidate perma bears and make them buy back higher accelerating the price increase.
Middaily picture is super clean and clear. In fact it doesn’t need a lot of commenting on. Typical hidden bullish divergence with Higher Lows on Price Action and Lower Lows on Momentum oscillator. It’s clearly proving technical REaccumulation happening on dips. Every decline is quickly bought up, while bitcoin is holding MA50 and has just bounced of this support. In case of clean and ugly invalidation due to unpredicted black swan news/event that impacts all of the markets and metals like gold and silver, bitcoin could see a sharp retest of 10000-10700 area which should be strongly bought up aggressively by institutional investors.
MTF picture presented with the use of Trendspider’s raindrops. Amazing combination of volume and VWAP (Volume Weighted Average Price) proves local bullishness of the setup as long as it breaks the MA50 resistance and horizontal level of 11900. Once done the next levels to revisit should be 12200-12400 zone. 11300 acting as a support level from MA200 support. Price territory of the entire sideways-vibe movement of past weeks oscillates between 10600 and 12400 and as long as this territory is traded by investors, the move is supposed to be non-directional form of movement, where dips, fakeouts, bull traps and bear traps may easily happen and it would still not impact the bullishness of a large timeframe picture of bitcoin that is getting ready for further expansion. Market is taking a breath here.
Hourly analysis of volume by price profile is proving local kel S/R levels are 11700-11800 with POC (Poin of Control) with biggest volume intensity at 11700. Not much of resistance above locally, yet local 11350-12400 range brings additional significance to 11700-11800 zone which is working as 50% Fibonacci retracement level – mid-range bias shaper. In case of breaking 12400 resistance the next resistances are 13000, 13500, 14000 and beyond. Before I let you go, make sure you visit our latest podcast with truly inspiring guest, one of the best creators in the space, Koroush AK. Im sure you know him well. Can’t disclose too much yet, but we might soon kick off big project together! Learn why and listen to the podcast with the link below.
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