Daily Report – Bitcoin and Market Update (July 11 2022)
The weekly chart has added yet another bar print, underneath the 200-week average (22637 USD).
The 50-week trend continues to decline slightly, right at $42540 level, for now.
The 7-week correlation coefficient of BTC vs S&P 500 resides in the high region, at 82%. This proves a strong directional connection between the large cap equities and bitcoin prices.
While the 22637 USD level seems to be providing some sort of anchor and reference point to the traders (heuristics), the 50-week mean may act as a long-term resistance for BTC.
Otherwise, no reversal pattern is confirmed or complete just yet.
The middaily chart has confirmed the peak overthrow pattern at 22000 USD, so far.
A series of lines failing to reclaim the said resistance proves that those have been mainly for liquidity hunting, trapping many traders underwater on their early entries.
The sideways pattern between 17500 USD and 21800 USD continues to develop, and despite the higher high and higher low prints, arguably, the pattern may stretch to the downside. It is, because failed patterns tend to perform better in the opposite direction than anticipated based on the breakout direction itself. A peak failure boosts the chances for a local reversal and downside potential. For this, BTC may be due to meet the new lows soon – unless a sudden rally comes from the outside of the market.
The CTF Trailer remains on the bearish side, and the bears hold the upper hand, as long as BTC does not reclaim the $21795 resistance level.
The MTF chart displays a clear instance of a top failure pattern, or a fake breakout.
As mentioned before, the failed patterns have the tendency to perform better in the opposite direction, which increases the downside risks, in theory.
The CTF Trailer has just flipped back to the bearish note, and is likely to continue flipping back and forth, bull to bear, for as long as BTC trades inside the sideways pattern, limited by the swing low at 17500 USD, and the highs of 22000 USD.
Furthermore, relevant support levels rest at $18985 (19000 USD) and $17104 as given by the BPRO. At the same time, the BPRO Level Lines define resistances at following anchors:
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
The short-term pennant pattern has failed, and as a result a following downwards acceleration has appeared.
The support level preceding the upwards breakout recently, has failed to play the role of support for BTC. This suggests that the chances are that bitcoin prices are due to continue lower.
While it is not set in stone or bound to happen, BTCUSD may see a further deterioration.
The sentiment continues to crawl in the depths of the bear market, contributing to the overall capitulation period.
Now, at 22 points on the scale, there has been a slight numeric improvement. However, this is not enough to back up a reversal pattern concept.
On the contrarian basis, the majority of underinformed traders will continue to under perform as they are always wrong at the extremes. While there might be more downside risk ahead, the contrarians may expect profitability in the following months.
Bitcoin: Net Unrealized Profit/Loss (NUPL)
The NUPL ratio records a print at -0.06, adding yet another reading under the capitulation category.
If history is of any lesson, arguably, then BTC traders may soon expect an upwards breakout, following a reversal pattern within the depths of 70-90% drawdown levels.
Otherwise, no short-term indication or confirmation for a reversal pattern have arrived.
There’s more to comment on the price action, though. I’ve made sure to explain it deeply in the premium video report available to the exclusive members. To gain your discounted access, click on the link below.
Hope it helps. God bless!