Daily Report – Bitcoin and Market Update (January 11 2020)
Weekly closed as a center-oriented, high wave (long-legged) candle showing insane volatility intraweek. Momentum is still showing some strength although after the bearish cross, more caution should be applied to any moves right now. 3.618 Fib extension of bull market bottom, 2019 high and 2020 March bottom, located at 43k acted as enough of the resistance and the upper candle shadow clearly shows 38.2-42.2k was filled with strong supply and selling pressure. Note the increase in volatility per ATR on top of the chart, since the rally started in October, then weekly volatility increased by 270% on average. Current average week presents traders with 4000$ change.
Daily shows complete 28%+ retracement which still hasn’t tapped an actual VWAP level of volume-backed support. PoC (Point of Control) with greatest volume is presented at 22.5k on the daily chart if we account start of the latest rally to be at 20k breakout zone. MA50 support is at 25k. Notice lack of volume on the way up from 35k up to the top. I raised my concerns about it and size of the upcoming volatility many times in the reports. Hopefully, those who follow my reports took my suggestion on last Friday when I announced I had cashed out part of my profits. Key daily resistance is 39-40k area.
Middaily bounced of MA50 area, although it was not tapped properly. Usually it’s a sign that there’s one more tap to sweep to lows. It’s not of certainty but more of high chance case to wipe out over leveraged longs for the last time before 39-40k retest. Momentum broke neutral level of 50 points which most often means that it’s set to reach the opposite extreme band (0-20 oversold zone). TK histogram on birbicator also flipped bearish, which shows short-term averages Tenkan & Kijun crossed bearish as well. It will probably take some time, not just one day, but an actual few days or 2-3 week correction most likely. That’s the dump I had been warning it would come in January. So no, bull market isn’t over. Yes, that’s typical to bitcoin but you know that already,
MTF picture is showing strength since 30k upswing. It seems locally bulls are in the control as intraday patterns keep breaking upwards. Resistance cluster is located at 50% of the retracement combined with MA50 and VWAP anchored on highest high. It looks more of a breakdown retest rather than ultimate bottom so far. It seems the scenario where BTCUSD corrects for a few days or 2-3 weeks might be in play and we may be looking at typical ABC correction. Note MA50 has gone flat after the 13k dump. Expecting bearish reaction at the retest level and in case of following through after initial rejection, retest of PoC at 40k seems ideal scenario. In case of lack of following through the MA50+VWAP resistance, rejection occurs and BTCUSD sees retest of MA200 ~27k for complete correction.
Hourly tapping into local supply backed by Volume. MTF 200MA is flat while MA50 is about to nose dive below MA200 to form bearish crossover. Next bigger volume-backed resistance is 38k in case 34.5k is reclaimed after breakout retest. If rejected, then 32.5-33k support area should be retested. The most ideal and textbook scenario is visually presented in the chart on the bottom. Currently it seems that LTF-MTF trend has changed from super bullish to corrective at least for a few days. In flat corrections, trend is oscillating between range low and high areas in a very choppy way. Current volatility levels are insane and unseen ever before. In the correction, market stabilizes, takes a breath and returns to average, more regular volatility. For that you can observe Bollinger Bands and the size of the bandwidth (distance between the bands). The bigger volatility, the bigger risk and chances of losing. Positions imo should be taken only around the extremes, which is near 30k and near 40k. First one is for longs, second for shorts.