Daily Report – Bitcoin and Market Update (February 26 2022)

HTF 12H:

The middaily chart seems to be knocking on the local resistance doors at the 40000 USD level. Is this a moment of a breakthrough?

BTCUSD has been locally consolidating inside a narrow range 38500-40000 USD, backed by the BWAP block, defining the local supply, as well.

The Current Time Frame Trailer remains under the bearish influence after prior losing of 41500 USD support. Ever since, the market has reached the lows of 34500 USD support, triggered along with Russia’s invasion on Ukraine. As the bears are in control still, there is the key resistance level at CTF Stop 40806 USD, which the bulls must reclaim in order to re-gain the upper hand in the market.

Price action wise, bitcoin is moving inside a sideways movement defined between the extreme boundaries – the low of 33000 USD, and the high of 45800 USD. As long as the market fluctuates within this range, bitcoin is not trending. A proper trend shift comes only with a breakout above the 45800 USD highs, or a breakout to the downside below the 33000 USD low.

MTF 4H:

The MTF chart is showing BTC struggling at the 40k USD resistance, whereas the volatility analysis implies there might be more upside room for growth.

Primarily, the breakout over the 38761 USD level has turned bitcoin more to the bullish side, and as long as BTC trades over this level, it’s supposed to aim higher into the 41-42k USD region.

The BPRO Momentum Bands suggest that the average volatility of bitcoin (per standard deviations) is defined at the 34.6-41.8k USD zone as the most likely zone to trade inside.

The BWAP block supports bitcoin in the 38.1-38.4k USD zone. Yet, in case it’s lost, the chances are for a cascade selloff into the 35000s USD area.

Furthermore, BPRO Level Lines show resistances at:

45946
42926
41373

Meanwhile, BPRO Level Lines show supports at:

38761
36330
35352

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 displays a local fake breakout to the upside, a failed swing pattern. This is a failed attempt of a break outside the ascending triangle chart pattern. More often than not, the specialist breakouts like this one tend to reverse the trend, at least for the short-term.

The BPRO portrays the most important pivotal levels and zones with the help of the BaseLine Vave Pivot tool, which visualizes the demand/supply blocks. Based on that indicator, one may conclude that there is a local supply zone given in the gray region at 39500-39700 USD.

The same indicator implies that the local support level is mainly given at 38500 USD. If this level fails to hold, bitcoin may sharply fall down to the 34600 USD level, with a support zone on the way down at 35-35.5k USD.

A successful reclaim of the 40000 USD resistance, with a daily/weekly close above this level, may lead to another attempt of a break above the 45-46k USD supply layer, and further potential 50k USD region. Although, this scenario could only happen, provided that Russia-Ukraine tensions fade away, as well as the rate hikes by the FED are delayed/canceled. Otherwise, the exogenous FUD factors may cause a roller-coaster in the risky markets with another batch of severe declines.

FEAR/GREED INDEX

The fear saga goes on with the index pointint at 26 points with its hand on the scale. This lies under the category of fear.

Unquestionably, the recent Russia’s invasion on Ukraine has contributed to the deterioriation of the market sentiment in terms of the optimism on the traders’ side.

As long as the fear or extreme fear lasts, and it’s been so for a long time already, then bitcoin can be read as undervalued. It is, because the crowds often read the extreme market movements wrongly, expecting never-ending continuation of the same direction. More often than not, it is proved wrong over the time, just confirming that the fear environment is better buying than selling opportunity.

For more market insights, head to my yesterday’s webinar explaining in depths the correlation of bitcoin to the SP500 movements. Catch up – link below.