Daily Report – Bitcoin and Market Update (January 8 2022)
Middaily chart seems to be basing within a local support zone combined out of two important technical indicators.
Firstly, there’s BWAP block which is volume-based average price zone defined between 41.4k-42.2k USD. Depending on whether the price trades above the zone or below it, It serves as a technical support or resistance accordingly.
Secondly, there’s BPRO Level Line support defined at 40774 USD which so far has been held up successfully providing a local upswing over it.
CTF Trailer shows bearish corrective movement (lasting since mid November) can come to an end only with a strong 12h, 1d or 1w close through the Stop (invalidation) level at 46300 USD.
Price action wise, I’m not completely convinced about the strength of local basing pattern. It doesn’t provide any clear symptom of reversal just yet. Because of that, I would be expecting the main battle to happen around the weekly close.
In case of current lows failure at 40774 USD, it may happen a lows sweeping process at the previous support of 39.5k USD with local wicks down to 38.5k USD. It’s not bound or set in stone.
MTF chart shows a black-marked candlestick series with no short-term reversal signals confirmed yet.
BPRO in the BTCUSD chart represents demand and supply zones based on price pivotal points. Hence, it reflects the most important zones and levels based on the technical analysis over candlesticks and price action. It suggests that the most important level for the local price action of bitcoin is the resistance at 42.6k USD. A proper breakout through this level to the upside could imply that the next zone of interest would be a supply area at 45.8k-46.9k USD. Then it also implies that if there’s a proper reclaim and strong 4h or 1d close above 42.6k USD, it would strongly increase the chances of market reversal.
As mentioned before, an ugly 4h or 1d close beneath current lows of 40.7k USD, it increases the risks of getting lower down to 38000s USD. As long as bitcoin does not confirm reversal and close through 42.6k USD, there is a risk of further intraday declines.
As the sentiment analysis will reveal though, this should be overall a part of the process of bottoming – regardless it reverses now or declines to 38000s USD.
The hourly chart reveals a local sideways movement going on for bitcoin with several attempts of sweeping the lows.
BPRO Momentum Bands suggest that average volatility should let BTC continue inside the range bound between 41000 USD and 42870 USD. A proper breakout with a successful retest would signal abnormal volatility in a specific direction towards approximately 45k USD in case of an upside breakout, or 38-39k USD region in case of a downside breakout.
CTF Trailer has invalidation level as the stop at 42871 USD, which with a strong 1h close through should be followed by a stronger move upwards.
BPRO Level Lines show updated support at (USD):
BPRO Level Lines show resistances as follows:
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”
Extreme fear strikes again. This time, the fear is only comparable with only 4 instances met ever throughout this entire bull market started in 2018.
The only times that the market was this oversold based on the sentiment (which directly is backed by technical oversold conditions) were when bitcoin traded at: $3000, $4000, $10000, $30000. Not long after these records were achieved, bitcoin has rallied 340%, 17%, 1585%, 141% accordingly.
Though, it’s not a timing indicator so it is not fair to expect it to show you perfect top or bottom or top.
The crowds are usually right in the middle of trends and wrong at the extremes.
Hence, this sentiment measure conveys a message for when an asset is cheap (extreme fear) or expensive (extreme greed).
Here, it’s confirmed to be exceptionally cheap from when compared with the course of entire price action of this bull market.
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