Daily Report – Bitcoin and Market Update (July 3 2021)
BTCUSD closed the day in favor of bulls in a way that did not flash the bear trend change indication from BPRO. Bulls were lucky here as that was local do or die and on weekends it usually dies. As long as BTC trades over the baseline it’s safe territory for bulls as local trend is over the average price.
MTF perspective has not changed by a single point through past weeks, sadly. Still the same dull range which expands into advanced medium-term pattern already with the length of over 1.5 month. With all certainty this is classified as medium-term aka secondary “trend”. This suggests that you could also expect similar significance and longevity for the upcoming breakout. My bet is obviously still that this is going to be an upside breakout into high 40000s or better, provided that the world does not go crazy with military conflicts, wildfires, countries aggression or other unpredicted catastrophes.
Breaker Low is 31554 and this is the level defining the last bullish bastion that once broken may indicate deeper dive below 28k.
BVWAP cluster of volume based trendlines suggest that the most essential supply remains in 40.6-43.1k. Knowing that basically the next massive move is supposed to bring THE breakout in either direction (expecting upwards), you could expect big volatility incoming in next days-weeks. Volatility in financial world means risk. I’d suggest you do not over trade this period for btc or alts. When volatility is brought back, capital would flow out from altcoins into bitcoin making altcoins bleed severely.
If bulls manage to close a week or July over 43k, this confirms next targets to be R2 45126 and R3 52199.
MTF picture locally with buy signal on 4h chart. One can tell BTC is currently right around the average, in the very middle of nowhere. Perfect middle of the entire medium-term range defined by recent volatility. Note that the volatility bandwidth suggests that current trading range is between 29.7k support and 38.5k.
Breaker Low is 31420 is if bulls fail to defend this support, this may mean further market declines towards S1 26941.
As long as the bottom fakeout (30->28.8k->30k+) stands valid, I look upwards. Invalidation of the fakeout would be very bad for bulls and may end in premature bear market. Although I do not believe it’s too likely to occur, I suggest that everybody should be ready just in case unexpected black swan comes in and entire market drowns in FUD.
Breaker High is 39610 and if we see close over this level on any weekly or monthly candle, this would unlock further resistances quickly: 41265, 45699 and further up.
No deviations so far as opposed to the ones seen on top. NUPL ratio at 0.42 suggests that the market has a lot of upside room when compared with historical records. Any bear market for bitcoin in the past has always started only after breaking over NUPL 0.75 ratio. That has not happened during this bull market yet.
Current read on the index keeps suggesting extreme fear with 24 points on the scale. It’s the longest period market has ever stayed this long with such bearish sentiment.
As mentioned on the last report on Monday, even 2018 bear market bottom depths of depression were not equal to current lows on the bitcoin’s sentiment. Historically, extreme fear has always been of great risk/reward for large players and long-term investors who understand the market mechanics and facts that the market (retails) is always right inside a trend but always wrong at the extremes.
Retail and unexperienced investors tend to over exaggerate their bullishness at peaks and bearishness at troughs.
As behavioral finance explains for the perception bias concepts, it is confirmation bias and saliency that push people into thinking the market will continue following the same direction forever.
Which is why most of traders would do best if they counter trade the sentiment AFTER extreme movements with abnormal volatility on the markets.
For more reliable information, I encourage you to review my yesterday’s webinar below. God bless!