Daily Report – Bitcoin and Market Update (January 10 2022)

By Cryptobirb

HTF 1W:

Weekly chart closed right beneath the prior low of 42333 USD. It failed to be a classical swing failure pattern or fake breakout. It would have been best for bulls to see a weekly close above this level. Although, price action wise, this weekly close occurred inside September 2021 demand zone, so not all is lost just yet. On top of that, remember that 38.5-40k USD region is still “acceptable” retest zone as it stands a support, technically.

Fibonacci retracement levels usually suggest that 61.8-78.6% retracement area is potential reversal level for a deeper corrective waves. Because of that, risk/reward for selling at these levels is not really favorable.

The most worrying aspect on the weekly chart is an ugly close beneath 50-week average for the first time since February 2020, before the covid crash. This definitely is not a bullish symptom. While at least a short-term bounce is expected nearly, this signal may imply a few weeks-months more to spend inside the range bound 30-70k USD.

It would be fair to expect more weeks of “boring” price action, unless a rapid, surprisingly strong move up into 50k USD region comes fast.

HTF 1D:

Daily chart looks oversold with lots of wicks down on the candlesticks of recent daily sessions.

BPRO suggests that BTCUSD has tapped several times into the volatility lows defined by the Low Momentum Band based on the standard deviations.

BWAP block suggests a basing pattern that had been going on for the past few days before today’s drop beneath. As long as the day today manages to close above the block, it is a potential bottom pattern supported by the volume and volatility.

High Momentum Band shows volatility based supply to be expected at 51.5-54.5k USD. This implies, that if in fact today is the bottom day, then it is fair to expect low-mid 50000s USD region retested sooner than later.

CTF Trailer shows invalidation stop for the bearish thesis at 47919 USD. Strong close above would confirm the end of correction from 69k USD highs.

HTF 12H:

The middaily chart shows similar story here.

Oversold volatility for bitcoin tapping into Low Momentum Band with another rejection of volatility breakout (so far). This suggests that this technically has high chances of being a bottoming process. As any market reversal, it takes time and is not immediate. That is why I call it a bottoming process and not a bottom.

Momentum per RSI is oversold, which can be seen as dark orange shadow beneath last 3 candlesticks in the chart.

There are still technical chances of visiting 38-39k USD region, unless we see bitcoin close through CTF Trailer stop at 45629 USD, which would invalidate the entire corrective movement lasting from mid November.

A strong close above 45629 USD would imply move expansion into 48-50k USD region soon after.

BWAP basing pattern (same as on daily) would work best if BTCUSD sees a strong close above the volume-weighted gray block.

MTF 4H:

MTF chart suggests that to give a reliable reversal signal for the last few days of ranging at the lows, bitcoin would need to close a 4H or 1D candle above 42.6k USD level, which is a key pivot based resistance.

It is the most important resistance for short-term price action. Once broken, it should lead to 46-47k USD retest.

As long as BTCUSD trades beneath this level, there’s always going to be a risk of further downside into 38.5k USD region to sweep the lows of September 2021 reversal. Worth keeping in mind.

Locally, 41.1-41.4k USD is BWAP block which defines volume-backed resistance zone for now that bitcoin should close above to keep it somewhat bullish.

At the time of writing, it’s around 2.5h left till the session close and it would be best for bulls to close this session above this zone.

LTF 1H:

The hourly chart shows off a lot of indecision going on for bitcoin on the intraday basis. After flushing over leveraged longs and late shorts, bitcoin bounced off 39.5k USD to reach 42k USD resistance soon after. Now dealing with local rejection and quite a nasty hourly candle – not closed yet, though.

BPRO lays down key level to be 42.6k USD one more time, right above Level Line resistance at 42333 USD.

Price action wise, bitcoin is back inside its range of the past few days.

BPRO Level Lines show updated support at (USD):

40904

BPRO Level Lines show resistances as follows (USD):

46827
45617
42333

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”

FEAR/GREED INDEX

The market hasn not been too generous with directions over the course of past few weeks. I know that I’m repeating myself often here, but the market hasn’t really moved at tiniest bit to let me change or decide upon a new narrative. It’s just been teasing us for weeks.

Another day in paradise of extreme fear shows that the majority of the market participants is downside-focused and of extremely bearish sentiment.

More often than not, this environment is a bottoming process, which – as explained above already – is not about a specific time, date, hour or minute. It’s more of a period of accumulation going on.

While at 23 points on the scale, it is NOT a timing indicator and its purpose is NOT to predict a perfect bottom or top. It suggests instead, whether bitcoin can be considered cheap or expensive.

In this occurrence, it is extremely cheap. And that is the position I stand by with my spot positions open. No leveraged positions open currently other than 29.6k USD long from July 2021, which just FYI was oppened in almost exactly the same environment as we see today.