Daily Report – Bitcoin and Market Update (January 31 2022)

HTF 1W:

Weekly chart displays a bunch of technically significant details worth mentioning.

To start with, 50-week average seems to be curving down slightly for the first time since May 2020, post-covid-crash period. This implies that long-term trend on average has started discounting the slowdown in momentum given the 2021 range bound movement. The fact that MA50 is currently around 48000 USD level, which generates approximately a 30% mean reversion swing potential from the current pricing. This implies that regardless of any potential dips further ahead, bitcoin should be trading back in the upper 40000s USD region sooner or later.

Price action naturally reveals no change in the overall trajectory of the long-term bitcoin movements. The range bound movement continues between 30000 USD and 65000 USD arounds (28800-70000 USD). Locally, 39573 USD seems to be the main local resistance to breach and reclaim in the short-term perspective. The said range bound defines a buy zone between 28800 USD and 32000 USD, while the sell zone remains in 65000-70000 USD region.

Momentum and trend seem to be fully reset and even more oversold than during May-August bottoming process of 2021. The last time it happened, bitcoin experienced over 130% price appreciation. Because the momentum has clearly slowed down on average, I would expect a bit less price appreciation than in 2021 just to be safe – as the direct technical result of such oversold conditions. Still, the history learns, that if no external news disturbs the technical, bitcoin should see between 50% and 100% price increase over the upcoming weeks.

BPRO analysis implies that CTF Trailer Stop at 49134 USD is the main resistance, a break above which could potentially unlock the new ATH following up. A strong weekly close above 41k USD supply block could prove enough of additional strength to retest the said MA50.

HTF 1D:

Daily chart shows a combination of BPRO indicators along with 200-day average. Let’s give a deeper look into it.

Firstly, it is interesting to note that the bitcoin’s 200-day average maintains smoothly upsloping trajectory. It’s not an extraordinary movement, but it is quite apparent that accounting the last 200 days of price action, bitcoin keeps appreciating on average. It is a positive sign.

Then, BPRO Momentum Bands imply the expected volatility zone to be defined in the 31.5-46.5k USD region (15k USD range size). The volatility demand zone is given at 31.5-34k USD, while the volatility supply zone is defined at 44-46.5k USD. The mentioned ranges suggest poor risk/reward ratios for opening the shorts and for the longs accordingly.

BWAP block supports price action of BTCUSD in the 36.3-37.3k USD region, which suggests that one 36.3k USD is lost, then bitcoin has higher chances of revisiting 31.5-34k USD zone. As long as BWAP demand block is maintained, bitcoin should be aiming towards the upper extreme of the expected volatility – the gray band.

Level Lines analysis prove the main levels to be as follows [USD]: 29807, 38466, 44758, 52277. This implies that a daily close above 38466 USD brings higher chances for retesting 44758 USD and 52277 USD. Otherwise, as long as BTCUSD trades underneath this level, one needs to always take into consideration external FUD factos and chances of tagging 29807 USD.

HTF 12H:

The middaily chart is quite straight-forward displaying one and the only upside level of the essential importance.

CTF Trailer Stop is set at 40365 USD at this moment. This level is a dynamic resistance of the correction that has been lasting for the last 2.5 months. This suggests that a proper a middaily or even better – weekly close above it will likely mark the end of the said correction and bulls re-gaining enough of the momentum, to reach towards 50000 USD area.

BWAP demand block supports bitcoin in the 36.4-37.1k USD zone. This means that the middaily close below that zone brings higher chances of BTCUSD re-testing 31.5-34k USD area.

BPRO marks current sessions with the orange color, which implies short-term strength where short-term bulls have potential for developing the price action in the upwards direction.

MTF 4H:

MTF chart shows a technical overview of several important levels and zones to pay attention to.

Initially, BPRO reveals that CTF Trailer Stop at 36523 USD is the main short-term support to be maintained in order for the bulls to keep the upper hand. A clean loss of this level means that the bears re-gain the control over the short-term market directions (and potential retest of 31.5-34k USD region).

BPRO Pivotal levels suggest that the main price action congestion occurs between 35800 USD low and 38000 USD high. A strong break outside either of these levels should cause the short-term price movements to persist in this direction.

Price action wise, it is worth noticing two flat levels: 40800 USD and 46000 USD, which could be expected to stop bulls for some time on the way up. The line chart displays “price essence”, so these levels are crucial and the gravity centers for the territories around them. In other words, one could expect the ask orders pile up around these said levels.

LTF 1H:

The hourly chart displays a local range bound movement defined by key pivot levels between 36.9k USD and 37.9k USD. As always, a strong breakout outside these levels should have short-term implications unfold in the direction of the breakout.

Supply zone is defined by Supply block of previous highs in 38.3-38.7k USD. Because this zone is nearly located to 37.9k USD pivot resistance, it is fair to assume 37.9-38.7k USD to be of the biggest strength for bears. Hence, it would make little sense, if you are a short-term trader, to open long positions right into the supply given above.

The resistances defined by the price action of bitcoin are given as follows:

43000
38750
37657

BPRO Level Lines show supports at:

36017
34786
33172

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”

Bitcoin: Exchange Net Position Change – All Exchanges

As glassnode explains, this stands for “the 30d change of the supply held in exchange wallets”.

It seems that the net position change implies way more bitcoins being sent out of the exchanges than into the exchanges. Especially, when it happens during the dips, it is more often than not a symptom positive for bitcoin, which typically implies accumulation processes occuring.

FEAR/GREED INDEX

Once again, the fear saga continues with yet another day inside the extreme fear environment in the market.

At 20 points on the scale, it adds another day to already 2.5month-long lasting correction.

I still maintain the point that bitcoin is in a wide re-accumulation range, soon to be followed be an upwards impulse – regardless if there is one more dip ahead or not.

As suggested before, “the majority is usually right in the middle of trends and usually wrong about the extremes. At times one needs to wait longer than preferred for a bitcoin bottom to form, but the history suggests every time bitcoin was this oversold, it was followed by a proper bounce and profitability soon after”

More details revealed as always in the exclusive video report available for the exclusive members.

I hope my today’s report helps you stay safe in the markets!