Daily Report – Bitcoin and Market Update (February 7 2022)
Weekly chart shows off a progression to the upside off the lows at 33000 USD. It seems that bitcoin is heading towards the $50k mean reversion retest.
Firstly, BTCUSD has closed a successful weekly breakout to the upside at the weekly highs, which implies that the week was dominated by the bullish recovery.
MA50 is set as potential resistance at $50k USD, which in my opinion will serve as a temporary stop on the way up. Because the profile of the average is relatively flat and low at momentum, it would be a bit surprising to expect a massive push through the ATH in one go, but I do not necessarily cross it out of my list of scenarios.
The weekly trend and momentum are still fully oversold at the levels of the previous bottoming regions: 3-4k USD, 6-7k USD, 30k USD. This makes me think that, overall, bitcoin has more upside room for growth and can finally over shoot the old all time highs at quite a decent, not-overbought, momentum.
The weekly supports are defined by the bottom candle’s high at 39000 USD and the following week’s close at 41700 USD.
Daily chart shows a first successful daily breakout over the CTF Trailer dynamic resistance since the correction started in mid November 2021.
After breaking through the CTF Trailer, the bull confirmation has been triggered and hence the official market tendency shifts in the bullish favor. Bulls have re-gained the upper hand officially and the momentum is on the bullish side. CTF Stop is set at 36398 USD which is the invalidation level for the brand-new upwards trend that has just kicked off.
That being said, BTCUSD is currently targeting the volatility-based supply zone 43000-46000 USD, which technically is rather a poor risk/reward spot to long for short-term positions. Long-term traders who choose to be more conservative and careful can choose to wait for the first successful daily candle above the High Momentum Band over 46000 USD, which would print a volatility breakout signal.
BWAP block shows demand region at 37.4-38.1k USD and in case of a sudden breakdown caused by external factors, I could see this zone playing out as one of the support areas.
For now, the trend is upwards-oriented with a bit of ease to be expected within the 43-46k USD.
The middaily chart is showing a sequence of upwards oriented candlesticks forming higher highs and higher lows. It stands for a clear definition of an upwards trend.
The main “signal” and hint of the momentum flipping back to the bullish side was flashed several days ago with the breakout above $40365 level. Since then, a new medium-term (at least) trend has been officially initiated in the chart.
CTF Trailer Stop is set (dynamically) at 40305 USD and in it could be used as a condition protective stop level. A daily close below that level (the breach alone is not enough; needs to close below) would hint a fake breakout and downwards continuation.
For now, the trend is aiming higher for the first time in the last 3-month correction period. Bulls have re-gained the upper hand in the market.
MTF chart displays a powerful breakout to the upside from a short term sideways movement between the 4th and the 7th of February.
Volatility based region provides supply within the 43.3-44.3k USD region and unless a successful breakout outside the upper band occurs I would expect at least a local short-term throwback towards 41-42k USD region. It’s not compulsory or certain, though.
CTF Trailer shows an aggressive expansion and provides the current BTCUSD upwards trend with a Stop invalidation level at 42466 USD. If a breakdown below that level happens, it is likely bitcoin see lower levels in the high 30000s USD as an option, especially 38.5-39.5k USD region defined by the Low Momentum Band. It is a volatility based demand zone for short-term longs to be placed more safely.
The Level Lines suggest automatically adjusted resistances and support levels accordingly as follows:
The hourly chart shows demand/supply blocks visualized based on the key pivotal levels of bitcoin’s price action. Hence, it reveals the most important technical levels of interest to pay attention to.
Local support is defined at 42800s USD and then further below at 41500-41700 USD region.
Most importantly, bitcoin has managed to reclaim the old levels of weakness at 43.1k USD with resistance at 44.1k USD yet to be tested.
BWAP support layer is given for the short-term price action at 43.2-43.6k USD.
As long as these levels said above are maintained, bitcoin has near targets 46300-46500 USD.
The index shows a hand at 45 points on the scale. It is still marked as the fear territory.
This is the first successful “breakout” on the sentiment side to the upside since mid December. The sentiment is improving, the more, the higher the price of Bitcoin reaches.
As the current movements are full of momentum and upwards pace, it may make the bears feel trapped and in danger of liquidating their short positions, so they end up either cutting the losses or risk the liquidation. Such a short squeeze can potentially add even more to the upwards momentum and cause the price of Bitcoin to appreciate even more and faster.
The crowds are usually right in the middle of trends and usually wrong at the extremes. While this is not a timing indicator, it rarely ever pays off to counter trade the side of the market gaining on momentum.
For now, unless external and unprecedented events, Bitcoin seems to be set for the further upside recovery, less minor interruptions.
More details will be shared, as always, in exclusive video report.