Daily Report – Bitcoin and Market Update (July 7 2021)
The middaily picture continues to be clueless. The trading range between 30k (28.8k) and 43k continues. Price action trading over the baseline and still on the buying mode on per BPRO. BVWAP based resistances show 40.5-43k zone to remain as the main supply cluster that once broken should bring upside recovery towards 44870 R2 and higher. In case 45k region gets cleared (weekly close over that level), which is the main daily resistance, then the next target zone is 51584-51902. It is a combination of Breaker High and R3. Currently, price of bitcoin is contracting inside a chart pattern of a symmetrical triangle. There’s an issue with it though. As you may remember, I emphasize always how you should NOT trust chart patterns which happen inside a trading range (pattern inside a pattern – fractal nature). I would not expect any reliable results out of this triangle. Even if we see an upside breakout, it may easily get invalidated/disrupted due to the neutrality/cluelessness of the bigger range the pattern is in. As long as the Breaker Low 31554 support is defended, bulls are safe. Close the day below and we could see bigger chances to visit sub 30k region again or even S1 26453 support if additional FUD comes in.
MTF picture is not much different to what I described thoroughly on Monday. Current triangle pattern should not be also considered directional. It does not reveal any direction in here. Whenever the market trends, it usually works as a continuation pattern. But here, it’s part of non directional movement so it’s lacking the steam and power to push in either direction. The only way it could come useful though, is that you could anticipate intensified volatility and chop the closer to the apex we get. Conjunction of the trendlines of the triangle and fact that we’re near the apex suggest that it’s correct to expect bigger volatility (breakout?) and messy price action coming within the next hours – days. Current volatility based range is between 30k and 39k for the next weeks. Local trading should occur inside 31.7-37.2k range based on short-range BPRO bands. Upside breakout over Breaker High 37466 should lead towards long-range band 39k retest and R1 41778 as the next target. Breakdown below Breaker Low 31419 would suggest further declines towards 30k and potentially 27276. There’s NO direction so no expectations can be safe or certain. There are no geniuses in sideways when the trading is way more random than inside trends (upwards/downwards). As mentioned recently, it is not suggested to trade the range other than:
1. Buying range lows 28-30k
2. Selling range highs (40-43k)
3. Buying breakout RETEST over 43k 4.
Selling breakdown RETEST below 30k
Net Unrealized Profit/Loss
NUPL ratio currently at 0.433 with no visible divergence. Not much inside market activity from the whales shows rather stagnation of the market and waiting game. Accounting the context, I’d still anticipate upside recovery knowing about the extreme fear environment
Clearly displayed, the market is considered by retail traders to be dead. No movements, no interest to trade, no ideas or scenarios from the retails other than death, end, capitulation vibes. Historically, extreme fear on the market has always been of much better buying opportunity than it would be for selling. For this reason, knowing that market is always right inside the trend but always wrong at the extremes, I would anticipate upside recovery. Condition is so that FED/Elon Musk or other FUD-sters, do not initiate another round of market manipulation with interest rates hikes threatening, military conflicts, etc.
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