Daily Report – Bitcoin and Market Update (February 14 2022)

HTF 1W:

The weekly chart has closed with a candlestick that could be interpreted as a shooting star or a gravestone doji type of formation. The upper wick indicates the bearish pressure and rejection off the highs at the $45500 resistance. The main resistance remains untouched still.

The 50-week average is set around 48000 USD at this moment and it is likely for BTCUSD price action to resist at this area when bitcoin gets there in the price chart. This, combined with the round number resistance of 50000 USD may work as a cluster of resistances, and a supply zone, where distributive process can take place in theory.

BTCUSD is trading around the mid-range region, accounting the 40000 USD – sized range bound movement that bitcoin has been trading within for more than a year. It adds additional psychological barrier to break through from the downside.

The momentum per the Birbicator on the bottom is accelerating in favor of the bulls after the bullish crossover, that’s flipped the Stochastic ribbon into the orange – bullish – mode. It aligns with the ascending histogram bars in the orange mode implying that the key underlying averages (based on Tenkan and Kijun oscillators, derived from the Ichimoku) are converging.

Weekly support is defined at 36-38.8k USD region, while the resistance area seems to be spreading in the upper 40k USD territory.

HTF 1D:

The daily chart shows BTCUSD course slowing down on the momentum of the decline, while sitting around the BaseLine average support.

The above mentioned suggests, that BTCUSD may be attempting to build a base/support at $42000 and so far has been holding above that level with an arguable success. The lower candle shadows imply the demand symptoms present underneath the BaseLine. It doesn’t seem overly significant or strong, though.

In case the average support fails to hold, the next logical support seems to be defined by the BWAP block (the orange box). It is a zone defined by the price and volume. Currently, it’s set at 39-39.8k USD region and it’s automatically adjusted based on the bitcoin’s price action.

That being said, bitcoin is still officially in the bullish mode of the trend and temporary crashes – coming from external factors (Russia – Ukraine) – may find bitcoin flash dip into the 38-39k USD regions (or lower, depending on the scale of a news piece)

HTF 12H:

The middaily chart is hovering above the most important technical support defined by the BPRO.

The CTF Trailer suggests that bitcoin remains on the bullish side where the bulls have had the upper hand and control over the market ever since breaking through the $40365 USD level.

For now, CTF Trailer Stop is set as a flat support level at 40496 USD. It is automatically adjusted invalidation level for the current status of the trend. It means that in case bitcoin records a 12H candle close below that level with clear rejection and violence, then the bulls lose the control, technically, in favor of the bears.

Because the trend is set on the bullish side as of now, the logical assumption may be that this support should hold. Yet, in case of a factual military emergency and war attacks, as well as other external FUD factors, I could see enough of a reason for this level to fail.

Technical analysis alone suggests that bitcoin is rather set for the further upside growth as of now.

MTF 4H:

The MTF chart reveals that BTC is currently knocking on the price action based, strong support line at $41600.

While attempting to build the base at the said 41600 USD region, bitcoin is sitting near the edge of a cliff. In case this support level fails, it is likely to see BTCUSD continue downwards towards the 40400-40800 USD area, defined by the volatility bands. Then, it would risk a fall off a clif towards 36000 USD, where the next clean line in the sand is given by the BPRO.

Momentum Bands suggest that the volatility to be expected for bitcoin in the next hours, days is occurring between the 40.4k USD and 44.6k USD boundaries. Breakout outside either of these could bring a volatility breakout and a more explosive movement with more severe consequences – both in the upwards or downwards directions.

The CTF Trailer Stop is set at 43433 USD level and it is a short-term invalidation level for the ongoing decline. A clean break above this level would result in a breakout confirmation to the upside and a new short-term control taken over by the bulls.

LTF 1H:

The hourly chart displays quite a tight range for the bitcoin’s price action.

The CTF Trailer Stop is set at 42683 USD level and a clean break above this level with a close through would confirm a short-term reversal to the upside.

The Level Lines define only two important levels to look at. It is the support level at 41611 USD and the resistance level at 44840 USD.

This could be interpreted in a way where BTCUSD is currently trading inside a very narrow range bound movement defined between the said 41611 USD and the 42683 USD levels. A breakout to the upside could result in bitcoin continuing higher into the 44840 USD level. A clean rejection of the support and failure to hold it could result in bitcoin reaching the lower levels.

In case of a breakdown, I personally see a technical reason to pay attention to the 38233 USD level in the search of the next support down the hill.

Bitcoin: Net Unrealized Profit/Loss (NUPL)

As the 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”

The NUPL ratio has flashed the 0.438 point after a local peak at 0.466 ratio.

This aligns with the local price action of bitcoin in terms of the directions. This is rather a healthy sign for the market as there is no divergence.

Overall, the market status seems to be put in the Optimism (in the upwards trend) or Anxiety (in the downwards trend) mode.

FEAR/GREED INDEX

As the military tensions emerge between Russia and Ukraine, at least based on the media reporting, it is safe to expect potential sentiment decrease as the fears intensify among the investors.

The index is flashing 46 points on the scale. It is assigned under the Fear category.

Like I have mentioned many times already, the crowds are usually right in the middle of trends and usually wrong at the extremes. Here it seems to be the first instance where the sentiment and the momentum back up the direction of the prior breakout – upwards.

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Overall, it seems to be a fair approach to NOT be fully exposed to risks during this uncertain week, as long as the threat of military conflicts are there. It makes sense to keep stop losses at the levels described for every time frame – depending on one’s specific interest. At times, it seems that even being 50/50 in/out of position seems like a safer approach to protect both sides of one’s portfolio in case the war intensifies for real. I personally am cautious with what the media present and take all with a grain of salt. Yet, it makes a lot of sense to be safe than sorry. Let’s prepare and be ready for the worst case scenario, because when this does not come true, one would still not lose on that.

More details in video report.

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