Daily Report – Bitcoin and Market Update (January 16 2021)
Middaily so far showing not much confirmation to invalidate my scenario/plan given on last Wednesday. Scenario is valid until the market proves otherwise and 12H chart doesn’t show any significant hints we do not visit sub 30k area. Momentum is on the slow but steady decline. Current strong support, that may stop BTCUSD on the way down, Is provided by MA50 at the level of 32.3k. While looking down, traders should also forget that we’re in the middle of strongest bull market in history for bitcoin. This means we should never forget to expect the unexpected and prepare an emergency plan in case the 26-28k scenario becomes invalidated. In such case, VWAP support at 36.5k holds and BTCUSD keeps closing higher timeframe candles 4h-12h above this average. Then the next resistances i.a. based of Fibonacci extension levels are as follows: 44k, 50-53.2k, 60k, 65k, 67.5k. Closing middaily candle below VWAP in an ugly manner brings very high chances of further decline down to MA50 32.3k
MTF price action is clearly consolidating inside a coil – symmetrical triangle. This seems to be well confirmed by the volume profile of the subsequent swings, which align well with trendline showing the actual direction of declining peaks and advancing lows. That IS the symmetrical triangle. After recent rejection of 40k levels, this added to the power of the supply between 38.4k and 40.5k creating one big cluster of resistance which will be hard to break. Key upside levels to look at: 38.4k, 39.3k, 40.5k. Key levels beneath working as supports: 36.2k, 35k, 34k, 32.3k, 30k, 28k, 26k. Reclaiming the upside resistance area with breakout retest will unlock next ATH levels. Breaking down below LTF demand shown in the chart, with confirmed breakdown retest (rejection of support which has turned into resistance) unlocks further declines and continuation of the plan/scenario given earlier in the week with 26-28k levels. Price action during weekends is usually sideways/corrective with lower chances of massive upside breakouts, which is why we should still assume 26-28k setup is valid. In other words, it is valid until the market says otherwise. It hasn’t shown otherwise, which is why we assume the scenario is playing out. While it may sound obvious to me, apparently it’s not necessarily obvious to everybody reading this report. I want you guys to use your own skills and improve. I’m teaching you to fish.