Daily Report – Bitcoin and Market Update (December 27 2021)
Weekly chart has seen a decent bounce off 50-week average support. It closed the week with a form of a bullish engulfing candle with a strong hit-back from the bulls. The support was additionally backed by the Fibonacci “golden pocket” which usually supports bounces in the 61.8-78.6% retracement depth.
Long-term upwards trend has got preserved so far. The sequence of Higher Highs and Higher Lows continues.
The pacing of the 50-week trend – aka momentum – has slowed down as a result of the last 6-7 months of sideways period. It’s better for the bulls if it continues ascending with the same speed or faster, rather than slow down, though.
AVWAP anchored at the ATH 69000 USD level suggests that key weekly resistance to reclaim for bulls is 53671 USD. Strong weekly close through could be an early indication of new ATH coming up.
As mentioned in the past reports, the old plan from June 2021 is valid for the trajectory. Time wise it’s got extended by 1-2 months.
1.618 and 2.618 Fibonacci trend extensions are still on the table as potential targets for blow-off top in the next months.
Daily chart continues local bullish thesis with orange-colored candlesticks trading over the BaseLine. It’s a bullish setup that where the long-term trend has been secured per the HTF Trailer (thicker orange line). This suggests that the entire correction 69k->42k USD has not disturbed the validity of long-term upwards trajectory so far.
Locally, bitcoin has a daily resistance at 54740 USD which if broken would validate medium-term bullishness. It would be significant invalidation of the corrective movement that started at 58-63k USD area per BPRO.
It adds up to the daily trend line breakout signal printed by BTCUSD. It’s a decent confirmation for a strong bullish upswing and potentially new highs.
Unless unexpectable FUD news or black swan events occur (military conflicts, new viruses, etc.) BTCUSD should see a major relief rally in the upcoming weeks.
The middaily chart continues with a bullish candlestick sequencing over the last few days – orange candles.
BTCUSD is trading over its BaseLine average and approaching CTF Trailer threshold at 52124. In case of an upwards breakout through this level, the middaily corrective wave would be officially finished with a stronger upwards trend confirmation.
BaseLine Bands are upwards oriented and ascending. This suggests that the average volatility based on standard deviations is set more for the upside and has expanded. It is supportive of a bullish thesis. Average volatility expectations for bitcoin is to find it trade between 44k USD and 55k USD in the upcoming days.
The BaseLine works as a mean reversion tool and provides bitcoin with technical support at 50000 USD level at this time.
MTF chart is in an upwards trend per the BPRO indicators, while price action still holds bitcoin inside a range bound.
The main consolidation movement ranges between 42000 USD and 52000 USD. Locally, there’s a range bound movement between 49.4k USD and 51.9k USD. Upwards trend is confirmed by the price action principles only after a successful close through the upper bound of 52000 USD.
BPRO Momentum Bands are currently flat and discounting the said local ranging environment. BTCUSD is trading in the upper half of the volatility zone defined at 47.4k-53.1k USD. A proper breakout through the upper band would imply a very strong upwards trend confirmation.
CTF Trailer backs up the upside movement as long as it keeps closing sessions over 49841 USD level. A strong break below that level may suggest a further correction to the low-mid 47000s USD.
HTF Trailer marks invalidation for the longer-term downtrend at 54740 USD.
The hourly chart shows a bullish candlestick sequence with a local bounce off the BaseLine support.
BTCUSD is currently trading right at the High Band which suggests that based on standard deviations, bitcoin is due to retrace from here – if we are to take the average volatility – or it would have a very powerful breakout signal which would have serious bullish implications. It might be a breakthrough moment for bitcoin, hence.
The average volatility suggests bitcoin should be trading between the floor of 49700s USD and the highs of 51800s USD. Therefore, it is trading at the volatility-based resistance now.
HTF Trailer supports upwards trend as long as it keeps closing the candles over 48754 USD. CTF Trailer supports intraday uptrend if it’s over 50604 USD.
BWAP block shows a support at 51.2-51.4k USD zone.
All things combined imply that bitcoin is trading in a very thin decision zone between 51.2k USD and 51.8k USD. The decision about the more explosive movement (rejection towards 49700s UDS or breakout towards 53-54k USD and beyond) is to be made inside this 600$ area.
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: Net Unrealized Profit/Loss (NUPL)
As glassnode explains, Net Unrealized Profit/Loss is the difference between Relative Unrealized Profit and Relative Unrealized Loss. This metric can also be calculated by subtracting realised cap from market cap, and dividing the result by the market cap.
NUPL ratio is at approximately 0.52 and shows off an alignment with price action for the local direction. It is a healthy sign that the market is in a good technical condition and no onchain divergences. In other words, it is not bearing any reversal symptoms and is rather supportive of the technical trading. In such case, time is the ally of bulls.
The sentiment has not much changed over the last few days and remains in the fearful environment.
As mentioned in the recent report, this rather could be read as a potential continuation premise. The fear at 40 points is not extreme so I would not necessarily consider this to be the best buying opportunity area. Instead, it is potentially supportive of the further upside movement.
The crowds are usually right in the middle of trends and usually wrong at the extremes. In this case, I’d rather read it as the first instance – the middle of the trend. The crowds don’t seem to fear of bitcoin declining more now. They seem to fear that they have missed out (or sold) on a bottom.
It is not a timing indicator and should not be read as such. To my mind, it is supportive of further bullish implications.
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