Daily Report – Bitcoin and Market Update (December 18 2021)

HTF 1D:

The daily chart is still under the influence of the bearish narrative from the MTF perspective. It has this bear annotation which showed off a potential bearish trend starting and not seen the opposite reversal indication as of now yet. It’s building support and volume-based block by BWAP (BirbWAP) defined by the new BPRO as significant zone for a potential bounce.

BPRO Low Momentum Band is also showing oversold conditions based on regular, average volatility defined by standard deviations. Bitcoin is hoovering right above the Low Band with orange shade beneath which suggests a potential reversal processing provided that no exogenous FUD factors disturb the chart unexpectedly. It signals RSI conditions being oversold and over-extended from the bearish side. Average volatility zone suggests that BTCUSD should be trading between 43k and 57.6k within the upcoming weeks.

BTCUSD is trading beneath the BaseLine which is the main hybrid average showing trend direction. As long as bitcoin is trading below the average it suggests it is suppressed by bears or that the bears are still in control. A potential reversal here would be more confirmed with a successful close of a day or week through the BaseLine.

MTF 4H:

MTF picture per the 4H time frame analysis suggests similar concept to the one described in the middaily chart section.

CTF Trailer (thin curve) suggests that the Current Time Frame trend direction is locally limited from the upside by the resistance of 48.3k which once broken and successfully reclaimed by the bulls with decent daily or weekly close through that level, then it brings higher chances of visiting the areas defined by BPRO Level Lines: 53110-53586, 59515 or 63224.

The main HTF Trailer (the thicker curve) shows that the main trend direction is having the main resistance at 55481. Once this level is cleared with a successful daily/weekly close through, it would imply a major trend change for the upside orientation.

Local BWAP support block at 46.2-46.7k is additionally backed by BPRO Level at 45954 which points out that this zone has higher chances of potential trend reversal. N that the current market direction is sideways and would naturally include more noise and fake signals but if used Trailer filters as bearish thesis invalidation for short-term at 48264 or longer-term at 55481 then this makes it much cleaner picture of resistances and upwards reversals confirmation levels.

FEAR/GREED INDEX

The index hand is pointing at 24 points on the scale which stands for the extreme fear sentiment on the market and pretty much oversold market conditions.

Now let me quote back what I mentioned on Wednesday:

As seen on the second chart, historically any time that bitcoin’s fear/greed index tanked into fear/extreme fear area it stayed there for a while and was associated with heavy accumulation rather than selling. Right after those periods of extremely bearish sentiment the market pulled back rapidly to the opposite end of extreme greed.

The crowds are usually right in the middle of trends, but they are usually wrong at the extremes and about guessing the market inflections. If no exogenous FUD factor brings in global instability for financial markets, it should be soon obvious in the hindsight that current levels of ranging market after 40% retracement were of decent buying opportunity and regrets for not taking it.

Fear/greed index is NOT a timing indicator. It means it’s not supposed to let you pinpoint the top or a bottom on the market. Instead, it shows when the market is considered to be “cheap” or “expensive”. Based on the readings, once may conclude that the market is cheap at this time.

Remember that new BPRO version is LIVE and you can get it with the link below.