Daily Report – Bitcoin and Market Update (June 19 2022)
The middaily chart has taken out the yesterday’s lows at 20k USD support and now bitcoin is leaking again.
The price action analysis shows downwards trajectory, which does not seem to be meeting much of support down the road. Instead, it rather points towards short-term continuation patterns, while BTC is tagging -73% retracement levels off the highs.
Historically, bitcoin bottoms out during bear markets within the 80-90% drawdown, measured from the peak. For now, BTC has reached the very same correction depth as the 2019-2020 COVID crash.
There are no confirmed signs of bottom reversal just yet. However, those may appear at any time, in the proximity of the cycle AVWAP support at $17789.
The CTF Trailer adjusts lower to the Stop $23421, which needs to be definitely reclaimed with a daily or weekly close above, in order to bring back any bullish rationale. Until that happens, the panic selling stage in the market may prevail and continue lower. It is the money that moves the market, as the investors sell off.
The MTF chart shows the continued downwards tendency of bitcoin prices, for now.
The short-term trend breakout threshold (CTF Trailer) proves the Stop invalidation level for the bulls to break at $21599. Until this level breaks, the bears are in control and have the upper vote in the market.
The BPRO Bands come up with a volatility range defined at the 19-23k USD territory. This implies that BTCUSD may be expected to oscillate within those boundaries, provided that there is no close of a session below the 19k USD support. If the breakout to the downside occurs, BTCUSD may see range invalidation and a volatility breakout, followed by a larger sell-off.
The BPRO Level Lines define resistances are projected 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 price action analysis does not seem to reveal any intraday reversal pattern to have formed, just yet.
The volatility has increased sharply, and almost tripled at the weekend’s 26k USD support breakdown. The greater the volatility (the bottom indicator – ATR smoothed), the greater the chances for the reversal. This stems from the fact that the biggest liquidations, fundamental market structure changes by the orders, occur at the very reversals. Hence, it also aligns with abnormal volume reactions.
An aggregation of volume spikes may be considered a leading indicator, as the major volume turnarounds aling with the market direction shifts, more often than not.
Further downwards continuation may be expected, until the higher time frame levels, described earlier in the text, are reclaimed and respected again.
The consistency requires a check on the sentiment.
In fact, some data vendors would display that never before in the recorded history of bitcoin, was it at this bad sentiment readings.
Now, at the 6 points on the fear/greed index scale, out of 100, extreme fear was taken yet to greater magnitude.
While it may not be read as a timing indicator like RSI or Stoch, which I keep higlighting a lot, it may still serve an important and valuable insight for the contrarian traders. They would typically buy when underinformed crowds are selling, and sell when the underinformed crowds are buying.
With bitcoin trading at 19000 USD now, typically buying into extreme fear returned positive ROI, when compared with selling into depths of panic selling. While it should not be considered a trading strategy or a system (one would still need a properly adjusted trading system, position sizing, risk management, and more tools), it may serve as a form of a magnifying glass to let the reader focus for when to start looking for opening positions.
Finally, technical analysis should be used to size the position and limit the risks.
That’s all for today. Stay strong and avoid leveraged trading through the capitulation process. Catching falling knives rarely ever works for the traders.
God bless all.
P.S. If missed my webinar updates for BTC scenarios, watch below