Daily Report – Bitcoin and Market Update (December 25 2021)
The middaily chart has seen a strong inflection of the prior downside oriented trend on average. There are multiple technical reasons for it.
Firstly, the Momentum Bands have recorded a decent inflection. They stopped going downwards and have started sharp increase – both volatility bands are now aggressively ascending after having expanded the bandwidth. It suggests that, on average, the volatility has increased and it’s now upside oriented in favor of bulls. Local rejection of the range highs at $52000 was combined with a tap at High Momentum Band acting as a volatility-based resistance.
Secondly, the BaseLine is sharply rising. It is a composite average of the price of bitcoin which suggests that bitcoin’s movement is strong in the upwards direction. It is due to the fact that the BaseLine’s slope keeps increasing. Hence, the momentum has started building up nicely. The momentum is what drives the price upwards. It’s the money that moves the market continuously in a certain direction.
Moreover, for the first time since 56-58k USD levels, the candlesticks are printed with bullish orange color. This suggests bullishness of a trend.
The only part missing to give ultimate confirmation for an upside breakout is a weekly close through 52000 USD level. It would be a price action based evidence that the market has officially printed a Higher High and confirmed a medium-term upwards trend. Potential target would be at 62000 USD.
HTF Trailer Stop is at 56488, which invalidates any bearish thesis per BPRO and breaking it could suggest that 62000 USD and new ATH should be coming after.
MTF chart shows a significant dose of bullish sequencing ever since the new 4H trend was spotted early by the new BPRO at low 48000s USD by the CTF Trailer. Several other points to note are listed below.
Primarily, the BaseLine average has recorded new highs versus for the entire range bound period 42-52k USD. It suggests that on average bitcoin has shown enough strength already to consider it a proper breakout over the sideways movement. Bitcoin on average is trending up already. The BaseLine serves as a support/resistance level based on the mean reversion phenomenon. It’s now supporting bitcoin’s price at 50.6k USD and in case it’s broken to the downside for whatever reason, it would become a resistance – polarity change principle.
Momentum Bands are pushing strongly in the upwards direction with relatively stable volatility (similar bandwidth). It suggests that based on standard deviations and volatility BTCUSD is most likely to trade between the lows of 47000s USD and the highs of mid 53000s USD. As long as the BaseLine ascends, the volatility highs are more likely to be tapped than the lows.
CTF Trailer validates the short-term upwards trend as long as bitcoin trades (keeps closing candles) over 48754 USD.
HTF Trailer is flat at 52120 and confirms that a strong middaily/daily close through the level would officially neutralize the correction and kick off new upwards trend.
The hourly chart suggests a local corrective wave similar to the one from before 49.8k->52k USD breakout per the BPRO indications. CTF Trailer suggests a local correction has just started with invalidation level of 51314 (1h or 4h close through). This is more of a noise warning as it’s certainly not relevant from the higher time frame point of view.
BPRO Level Lines suggest that if the history were to repeat itself this time, the potential target for the corrective movement would 49723 USD and/or 48858 USD.
HTF Trailer trendline invalidation level is at 48754 USD and in case of a 4h close below it may suggest a further “bearish” movement – extended correction while still inside the larger range bound and more accumulation opportunities for short-term.
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”
The index is pointint at 39 points on the scale out of 100 still indicating fear territory. It seems that now the crowds are fearing not about the market going south more, but more about them having missed out on the bottom.
The crowds are usually right in the middle of trends, but usually wrong at the extremes. It’s way more a middle of a trend now price action and sentiment based at this time. After a bit more of sideways chop, I’d expect bitcoin to keep unfolding with higher prices over the course of next days.
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