Daily Report – Bitcoin and Market Update (February 19 2022)

HTF 12H:

The middaily chart is revealing a bunch of technical implications derived of the most recent breakdown below the key support level at $40500. Let’s dive into the details.

Firstly, the fear-induced breakdown below the said support level has been empowered by the selloffs seen also on the external markets like equities. It is essential to understand that bitcoin is a subject to the macroeconomic and fundamental changes coming from the outside of the crypto market. More often than note, such external events like monetary policy changes, rate hikes, media manipulation (see Russia-Ukraine tensions), etc. In such instances, technical analysis is of secondary importance and even the best-looking chart may be disrupted by the external news at any time. Technical analysis gives a spectrum of the behavior between the traders seen INSIDE the market, assuming the OUTSIDE factors remain the same.

Trend wise, BTCUSD is still trading in a new bullish trend started at the bottom of the $33000 area. Now it is attempting to make an another higher low against the bottom. Locally it’s failed to hold the support line at the 41500 USD zone and hence is in a short-term downwards trend, being a corrective wave to the trend initiated at the market lows. Technical invalidation to the ongoing upwards trend seems to occur when a daily candle closes below 36000 USD level as of now. Price action based support is at 38250 USD region. Similarly, the resistance seems to be at the 50500 USD region.

As we dive deeper, the BirbicatorPRO has flashed an invalidation to the bullish control over the market since the breakdown of the 40500 USD level. For that, the bears have re-gained the short or medium term control over the market. Note that it does not certainly mean BTC is heading south to 20k as many may fear it is. Instead it means that the bears have the upper hand and are who dictates the play for the next days.
The bulls can re-gain the upper hand with a clean break and close above the CTF Trailer Stop at 43768 USD. The Level Lines provide bitcoin with support at 39158 USD locally. Meanwhile, the resistances are as follows: 46877, 52670 USD for the nearest anchors.

MTF 4H:

The MTF chart shows a set of the BPRO indicators.

The Momentum Bands imply that the expected range for the next days of bitcoin is given at the 38000-44600 USD zone based on average volatility per standard deviations. The dark orange shade of the Low Band indicate that the momentum is oversold while BTCUSD is trading near the volatility lows.

The BWAP block shows a zone based on the price and volume and for now plays a short-term supply zone – unless bitcoin pumps above 40500 USD.

BPRO Level Lines show resistance at:

45641
43078
41376

BPRO Level Lines show supports at:

38678
36208

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”

LTF 1H:

The hourly chart with the BPRO applied gives a clean picture for the major levels in the chart to note.

The Baseline Wave Pivots analysis shows that the main resistances are located at the 41600 USD and 44250 USD areas.

The local congestion and frequent polarity flips is occurring between the 39500 USD lows and the 41000 USD highs of the local sideways movement.

The overall instability of the financial markets past couple of days are not working in favor of the short-term bullishness. If added the sideways movement on top of that, it potentially lines up a short-term breakdown scenario which could potentially lead to the low 38000s USD region retest. It is, unless the 41600 USD is reclaimed with a daily close above.

FEAR/GREED INDEX

The military tensions seem to have induced quite a lot of fear inside the crypto market.

The sentiment is back at the extreme fear conditions.

As I often state, the crowds are usually right in the middle of trends and usually wrong about anticipating the extremes and reversals.

While the short-term movements are more or less chaotic and “random” due to the uncertainty, lack of momentum, the sentiment reads the current prices as potentially attractive within the medium or long-term scope of trading. For now, such an environment does not provide enough stability or predictability to open any new short-term positions in my view.

Finally, if you missed my yesterday’s webinar, make sure you catch up asap with the link below: