Daily Report – Bitcoin and Market Update (July 20 2020)
Weekly closed as a type of harami (inside bar) candle formation, although it’s not working the way it would work on trend extremes – there it’s usually super strong reversal signal. Currently trading above MA50 with MA20 (Bollinger Band’s mediane/mean) looking to cross over in a bullish manner. BTC is trading in the upper zone of Bollinger Bands which (unless mediane broken) most usually means the asset is more likely to revisit highs and upper Bollinger Band at 11000 resistance. Weekly is still printing macro scale upside continuation more to me which aligns quite well with onchain analytics e.g. Reverse Risk signaling HTF long signal, HTF hash ribbons buy signal on weekly, daily and more. Technicals and fundamentals combined lean more towards upsides and new ATH in 2020 or 2021. Only aggressive selloff might occur in case of sudden unpredicted black swan event that would trigger massive selloff across all the markets. HTF supports are 8600 & 8100. HTF resistances are 9750 & 10450.
Daily is extremely squeezed on Bollinger Bands inside super tight 9000-9400 range. Breakout in either direction would bring measured move of 400$ size towards daily SMA200 support of 8600 or 9750 of most recent key highs. Currently trading inside a completely neutral, non-directional sideways crawl that within next few days is most likely going to bring impressive 1000$ move that would liquidate a lot of over leveraged traders that are literally betting against the whales that will swing the market. Complete lack of direction while trading at the most neutral level past months. What can go wrong if you are over leveraged without a stop loss betting against those who will decide about the market direction with 1000$ candle? Highly suggested to set and trail up stops on unrealized profits over altcoin positions. Explosive move from bitcoin will most likely bring a lot of blood to most pumped alts.
Local range on middaily timeframe is 8830-9480 and it is placed between 40% and 70% of total retracement measured from peak of 10500. MTF wise (excluding overall helpless lack of direction) it’s slightly more profitable to long the closer it gets to 78.6% Fibonacci retracement level. Local breakout in either direction would most likely mean size of 650$ move which accounting local range boundaries would bring 10000 and 8200 on the table depending on the breakout direction. Short-term traders can long breakout retest or short breakdown retest although with insane volatility expected within next few days, I’d suggest one should avoid getting over exposed and in situation like this one, it’s often much safer to stay 50/50 btc/usd and let the market decide to later jump on the board in the right direction.
MTF picture is clearly showing bitcoin trading at the most neutral and unidirectional level in the entire chart. 9150-9250 is seemingly the worst place to make any sort of position decisions. Next days should bring intensified volatility which would most likely bring lots of liquidations across the market. Rather than making the wrong move, I suggest one should wait until the direction comes in a 50/50 btc usd setup. It would save the nerves, money and time. I personally anticipate retest of highs sooner than retest of lows but it’s impossible to predict any sort of black swan events like the one that reportedly crashed the market in March this year. Volume Profile Visible Range clearly suggesting the largest volume appeared while trading at 9250 level which needs to be reclaimed on the upper side by bulls to turn more to the bullish side of the MTF 8100-10500 range. Otherwise, we are still trading below MA50/200 setup, which because of lack of overall direction is not truly reliable.
Not to repeat everything that’s been already mentioned above, locally we can see somewhat more bullishness more than bearishness. It’s because of falling wedge pattern that is typically more bullish than bearish. At the same time, remember it’s inside a neutral consolidation on a larger scale which makes this pattern less reliable and easy to manipulate/not go textbook. Technically speaking, there’s been a breakout and currently bitcoin is retesting the wedge breakout. For any more reliable signal over lower timeframes, I would like to see 4h close above 9250. Yet it doesn’t change the fact I don’t suggest one trade intraday levels while being on the edge of insane move and volatility that may easily cost you big money for being wrong. Risk is too much against what one can win by intraday scalps on such pathetic ATR of 30-100$ moves past weeks. Stay safe and please watch my recent webinars from Thursday and Friday. Relax a bit with our recent episode p.2 with McAfee. It was crazy. Enjoy!
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