Daily Report – Bitcoin and Market Update (January 2 2023)

HTF 1W:

The weekly bar chart reveals that the BTCUSD price action oscillates around 16700 USD.

The bears will hold on to their technical advantage as long as BTC trades below $17500. A strong close above the level could accelerate further upthrust toward the 20000 USD barrier.

The 50-week average is 26731 USD, while the 200-week mean is 24468 USD. Technically, the zone between 24.5k and 26.7k should be considered a supply cluster.

HTF 1D:

The daily BTC chart unveils the picture of the main resistance regions from a technical standpoint.

Overall, there is a projected supply cluster within $17600-18200 after rounding up – traders love to use round numbers for easier mental frameworks. Hence, these work as more reliable technical levels to watch.

Then, the second resistance anchor is dictated by the 200-day mean at 19700 USD. As long as BTC trades far under this level (15% below), It generates mean-reversion pressures to the upside, as traders anchor the fair price to be at the 200MA. So, the price will oscillate around the mean as soon as the market stops trending down.

Since the recession effects are yet to be felt, the market may start 2023 with a slow recovery and the first major breaks to the upside. A significant reversal signal will appear when Bitcoin breaks above 20000 USD.

4H:

The medium-term outlooks suggest that BTC needs to break over the HTF Trailer Stop 16877 USD, with a daily close filter, to confirm an upward breakout to a new trend.

As soon as the threshold is broken to the upside, a new medium-term trend can emerge and add an advantage to the bullish side of the market.

However, a failure to do so may bring more downside damage to Bitcoin prices – failed breakouts often perform better in the opposite directions.

Bitcoin Average Mining Costs

The average production cost of Bitocin is at $18272, presently. With the current rates at $16704, the miners continue to be underwater on their mining business.

The longer they stay underwater at low BTC prices, the greater the chances that they will be forced to capitulate and sell off their Bitcoin holdings, to cover for business liquidation.

Bitcoin: Net Unrealized Profit/Loss (NUPL)

The NUPL ratio at -0.19 proves that most of the traders are still deeply underwater. There has not been much incline to the price, so it gave no opportunity to the losing traders to make up for their paper losses, either.

Historically, such deep NUPL troughs paired with major market reversals. While there’s no guarantee that BTC may not drop a cent below the 2022 bottom of 15500 USD, the market is sending a message that it may be a good contrarian opportunity to purchase below $20000.

Naturally, every trader will have their own risk preferences, with most investors being heavily risk averse and loss averse. This suggests they will hold on to their losses, and rush to buy after the market inclines. However, those who buy in at heavily discounted prices (-15% vs. 200-day trend and -31% vs. 200-week trend) will benefit from bigger gains (and higher risks).

It seems, overall that 2023 may be similar to 2019, in terms of being known as the “crypto awakening” year. It may be easily slowed down by unexpected black swan emergencies, war escalations, panedmics, etc. Yet, it may be a good idea to set a healthy dose of realistic optimism – especially into the H2 2023, the closer BTC gets to halving.

Hope it helps. God bless