Daily Report – Bitcoin and Market Update (August 25 2021)
Middaily chart is showing very decent bounce off the lows defined by the MTF upside trendline. As long as the candle is not closed yet, the things can change significantly but Id personally expect the close over 48144, which if occurs, adds solid support on the bulls’ side. The MTF trendline anchored at 29.2k lows is still valid and as long as it is valid, the uptrend is safe on its way to 53-58k imo.
There are several aVWAP (anchored Volume Weighted Average Price) trendlines anchored at subsequent swing lows of every bounce on the way up. The result is an average (fair) price of BTCUSD including the most recent declines and following bounces. The supports are as follows: 41.5k, 45861, 48270. If the higher one gets broken, then the one right below stands as valid support. The same case, with the lower levels.
The marked circle areas display every successful retest of the MTF trendline which was followed by a strong bounce.
One significant bullish signal that Id pay the most attention to right now is the bullish crossover of two aVWAPs: the one anchored at the top ATH (showing long term fair average price of bitcoin since ATH) and the one anchored at the final low 21st of July 29.2k (showing medium term fair average price of bitcoin since 21st of July). This bullish crossover stems from the fact that the shorter term (faster) average crossed over the longer term (slower) average. It’s a bullish MTF-HTF signal.
As long as the points above are valid the way described, BTCUSD aims at 53-58k imo.
Volume profile analysis suggests that once the PoC floor at 49k got lost the next support would be VWAP level of 47.8k. We have seen a form of an overthrow/fakeout/bear trap below 47.8k with the low established at 47.1k at the lower “volume shelf” (price level at which the volume spike appeared on the volume profile).
The moving average analysis for MA50 suggests that the short term trend is upwards yet of weak momentum. The low strength can be known by the slope/angle of the mean orientation. Lately, it’s not been straight up aggressively. Instead it’s been losing the steam and the growth angle/rate has not been as high as before August 15th. It tells me that the short term trend has signs of weakness, slowing down, where the bears start pressing more aggressively / distribution intensifies.
At the same time, MA200 (averaged price of bitcoin from the last 200 periods of 4h sessions) suggests very steady and strong uptrend. The MA200 is at 43.2k and that should be the next level of support whenever unexpected FUD news comes in, military conflicts emerge, etc. That would make it 15% drawdown from the peak of 50.5k. It wouldn’t be anything extraordinary for the volatility. Every trader should expect the bigger volatility, the closer to the local/final peak BTCUSD gets.
LTF chart today is also focused on the volume based trendline analysis. Three aVWAPs and each one is anchored at the key market swing. They all display quite narrow range of averages: 48094, 48304, 48720.
For the fact that these averages give quite a narrow range 48094-48720, as long as the price action stays over that zone, the zone can be considered local demand layer.
The longer/slower the average, the more relevant/significant it gets. Hence, the biggest technical importance gets the middle average at 48304 and Id consider this one to work as the main level to watch.
As long as BTCUSD trades over all the three averages, it’s short term uptrend towards the new highs or at least 50k highs retest. Close the day below 48094, or worse – 47.1k, then the next support unlocks at 46k (200-day average) and 43.2k
The ratio is at 0.571 which proves rather insignificant decline in unrealized profit on the market. This suggests that the profit realization has rather not been extraordinary, rather just a casual short-term, natural reaction after heavy pumps.
The market still is in the Belief area, which shows also the sentiment of the crowds on the market. The more money is being left on the table (NUPL increases), the more complacent the crowds get. Peak of an average trader’s certainty that they’re getting lambos on the next day, the closer to the peak BTCUSD gets.
As long as NUPL stays in the green area over 0.5 ratio, it’s decent chance to take some profits off the table.
From the last month’s extreme fear to the extreme fear at 73-79 region on the scale 5 weeks after. That’s how fast the sentiment on the market can shift. The more aggressively the market grows, the more certainty the crowds have and the closer to the local peak the market gets.
When you see average traders getting complacenet and calling you idiots for taking profits after massive run up, the more right it is for you to take profits. For those who longed bitcoin sub 30k or around 33k with me and premium members in the group, it’s wise to keep taking profits. Unrealized profit is no profit.
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