Daily Report – Bitcoin and Market Update (January 12 2022)

By TheBirbNest

HTF 12H:

The middaily chart is trading above the BaseLine for the first time since the breakdown on 27th of December 2021.

Because BaseLine is a hybrid average, it’s fair to say that it is a moving average breakout signal and as long as it is maintained this way, bitcoin is likely to retest further upside levels.

To name one, CTF Trailer has key Stop level at 45629 USD which if reclaimed by the bulls with a 12H or 1D close through, will confirm a significant breakout and invalidation of the bearish thesis lasting since mid November.

The basing process, as mentioned in the last reports, has found a strong support zone within 41.5-42.1k USD region. This, combined with the Baseline support at 42.3k USD brings the implication that the main support zone to be held spreads between 41500 USD and 42300 USD.

For these reasons, a daily or better – weekly close above 45629 USD brings confirmation for the end of correction lasting for the last 2 months and high chances of retest of mid-high 50000 USD, and potentially new highs.

MTF 4H:

MTF chart has presented traders with a successful close through CTF Trailer resistance of 43.4k USD. It’s the first successful close above this dynamic resistance ever since the correction started off 52k USD levels. With this breakout, an official short-term upwards trend is starting.

The BaseLine average is trading in the upwards direction while the price is advancing along with it. It’s a positive sign for the bulls.

BWAP block provides a support zone at 42.8-43.2k USD and combined with the average support at 42.5k USD it marks the demand zone wholely at 42.5-43.2k USD.

The only limitation is temporarily High Momentum Band resistance at 44-44.6k USD based on standard deviations (volatility). It suggests, that local range highs based on the volatility has been reached and hence the market is at the short-term volatility resistance. For safe upwards continuation, bulls need to close at least 4H candle or higher – 1D candle above 44.6k USD

Overall, after potential consolidation in an upper range between the BaseLine and High Band 42.5-44.6k USD, it is likely bitcoin sees an upwards volatility breakout. The condition is not to see a strong bearish close below the BaseLine. If that is secured, then bitcoin has high chances of retesting 46-47k USD soon after and 50k USD region.

LTF 1H:

The hourly chart shows off series of key supports and resistances marked.

Currently we’re looking at tiny bit of a correction after a decent push to the upside being a result of CPI announcements for December 2021 with 7% inflation mark. This news event, as any other, may see the price correcting back to the levels form before the news came out. That is rather typical of news-driven price shocks. It means that just in case it’s worth assuming that bitcoin may fall as low as 42800 USD before potential continuation higher. 42800 USD is the bottom level of local demand zone defined by the key pivotal levels for bitcoin’s price action. In case BTCUSD sees a strong and ugly close beneath that level, it is possible to see lower levels unlocked as defined below.

BPRO Level Lines show updated support at (USD):

42333
41754
40638

BPRO Level Lines show resistances as follows (USD):

47095
45617

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 has seen local rebound off 41-42k USD lows of the ranging market levels, while the fear environment has been been maintained.

As mentioned in the previous report, as long as the sentiment leans towards extreme fear, this implies much better buying opportunitiy than it is for selling bitcoin.

I stick to my point and observation that the sentiment indices do not tell you perfect time to open or close position but are good indication of whether an asset is cheap or expensive. Bitcoin has been cheap over the course of last weeks and over the time soon the profitability should be on the bulls’ side.

This indicator requires patience as it fades the trend flashing early symptoms of reversal.

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