Daily Report – Bitcoin and Market Update (December 22 2021)
The middaily chart shows off somewhat of a promising move and consolidation inside BWAP block (orange resistance area). Significantly, we’re witnessing the first orange (bullish) BaseLine trend and candles since 56k USD regions of late November and from before the main drop.
Locally, descending trend line acting as arguable resistance has been broken to the upside as well. I would not dare over estimate this signal as bitcoin is still trading in the range bound between $46000s (or $42000) and $52000. As long as it trades in sideways, every signal and technical occurrence should be taken with a grain of salt. Sideways is noise full of traps and fake breakouts. Yet, it is a bullish seed that may evolve into a proper bull over some time.
Per Momentum Bands based on standard deviations, bitcoin has neutralized any bearish momentum as the direction of both Low and High Band has changed from downwards to horizontal. This may be an early symptom or a trend inflection. Volatility wise, the range between 43.4k and 52.1k USD is the most probable zone to find bitcoin trade inside for the next weeks.
HTF Trailer resistance at 56488 is the main level invalidating any bearish impact of the retracement off the $69000s highs.
MTF chart shows BPRO based demand (orange) and supply (gray) blocks amongst other indicators.
Based on the Wave Pivots (blocks) analysis, it seems that BTCUSD is currently trading towards the lower area of the demand block while tapping the baseline. This is a first instance during the range bound period that bitcoin has developed somewhat longer period of an upwards trend over the BaseLine. This suggests that currently ongoing upwards trend lasts longer than any other ever since the sideways started. This, again, should not be over estimated, but it’s a nice start of something more promising for bitcoin bulls. Because it’s somewhat of a wobbly seed, it’s still vulnerable. Good symptom for bulls though.
BaseLine as a hybrid average is also expected to have numerous throwbacks and pullbacks – oscillations around the average causing the mean reversion effect. For now, it’s been mainly trading in the pattern of sine curve swings consequently, yet with this most recent breakout, there’s more strength to the move. As long as it trades beneath the supply block at 48.9-49.3k USD or breaks below the demand block floor of 47.9k USD, the momentum will not develop just yet. With no momentum, there’s no proper trend continuity and then no chart pattern or a breakout would have enough “power” to establish direction – it would keep swinging back and forth.
The hourly chart reveals a new upwards trend that started yesterday for the first time during this sideways movement.
Local sideways between $48300s and $49600s has higher chances, hence, to be of continuation than a strong downside reversal.
HTF Trailer supports the upwards trend as long as it trades and closes candles above 47353, which aligns well with the Level Lines support. In case of a breakdown beneath the range lows $48300s, then there’s also additional support at $48086.
BPRO Level Lines show resistances at:
BPRO Level Lines show supports at:
These levels could be anticipated to serve as level-to-level references. In other words, when one level is breached, the next one in the direction of the movement can be expected to act as the next “magnet”
Bitcoin: Mean Hash Rate (168h MA)
As glassnode explains, this metric stands for the 168h Moving Average over the average estimated number of hashes per second produced by the miners in the network.
Interestingly, this onchain indicator has printed somewhat of a “bullish divergence” as the hash rate keeps trending upwards (Higher Highs and Higher Lows) for the entire time that bitcoin’s price has been correcting. This may suggest that currently bitcoin is under valued comparing to its onchain tendencies.
Overall, it’s a good sign that the hash rate keeps climbing higher consequently. The more it does and the longer bitcoin’s price trades sideways, the more under valued BTCUSD becomes technically
The sentiment has reached neutral point after multiple sessions of deep fear. From 27 points on the scale yesterday to 45 points today, it’s been decent increase correlated with bitcoin’s price going up locally.
Usually the neutral sentiment suggests a trend may be developing. In the local context, it refers to a local upwards trend. I’d prefer the crowds to disbelieve this movement a little bit more to make it all feel “safer” for bulls. Although, a neutrality is not a bad sign here.
Usually, the crowds are right in the middle of trends and wrong at the extremes. It seems it’s more of a middle case than extreme then. I would not fade or counter trade this upwards thrust then.
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