Daily Report – Bitcoin and Market Update (August 27 2022)

HTF 12H:

The middaily chart seems to be confirming a further downside potential, following yesterday’s volatile breakdown.

An aggressive selling bar closed off the daily session after Jackson Hole speech of J. Powell. Breaching the support region and closing below can rather be considered more bearish than bullish. This validates a downwards breakdown, and deepens the overall correction coming off the peak at 25000 USD region.

The CTF Trailer remains on the bearish tone with the main resistance level at 21463 USD. Once this level is broken to the upside, the bulls regain the control over the market and boost the chances for an upwards continuation.

However, there have been several instances of a top breakout failure. Shaven tops have contributed to an overall breakout failure, and failed patterns tend to perform better in the opposite direction than anticipated just on the breakout direction itself.

For this reason, it is possible that BTC may accelerate a downwards trend, in the near term – especially, that the bearish pennant price objective after the breakdown rests at 19000 USD.

MTF 4H:

The medium-term chart reveals another instance of a confirmed breakdown.

The breakdown may be considered confirmed and reliable, much more than note, because the piercing session broke below the regular volatility frames. An appearance of abnormal volatility at the breakout validates such a breakout setup.

As such, this may add more momentum to the downside as BTC accelerates the sell-off.

For now, arguable target of the said breakdown may be as low as 19000 USD, accounting for the bearish pennant pattern objectives.

Because the pennants are half-mast formations, the price objective may be similar to the size of the poll, or a mast attached to the pennant itself, based on the measured rule.

LTF 1H:

Meanwhile, on the hourly chart, there are no signs of any downwards trend exhaustion.

The BPRO Divergence System does not detect any oversold market conditions, or over stretched trend sentiment.

In an event where a bullish divergence appears, the short term BTC price action could be due for a short-term pullback. However, until it is signaled, there are less chances for Bitcoin prices to reverse in the nearest future.

FEAR/GREED INDEX:

Now, at 28 points on the scale, the sentiment among investors can be classified again as fear.

As mentioned in my last market report:

“Typically, the more extreme the fear environment becomes, or the stronger the herd’s opinion gets, the higher the chances for a contrary movement, and the better the opportunity for the contrarians to benefit from it.”

Traders need to acknowledge that while new lows may be expected within this bear market, some short-term pullbacks to the upside may interrupt at any time. The market never moves in a straight line.

Especially, on lower time frames, it is full of interim noise, which confuses most of the traders anc commits to the whipsaws.

For more information, catch up with my yesterday’s webinar below.

Hope it helps. God bless.