Daily Report – Bitcoin and Market Update (June 21 2021)
Weekly closed as somewhat promising candle yet the Monday opened with China mining crackdown FUD release which pulled the market lower with 10% decline. At the moment of writing this report, BTC is trading at 50% discount measured from the peak which assuming there’s no bear market going on (still, imo). Entire situation is bit more than just a regular correction, no doubt about it. Is it really a bear market? Not really in my honest opinion. It’s actually pretty complex term to define in terms of crypto. June 2019 and H2 retracement brought drawdown worse than 72% and we still saw series of new all time highs right after. Similarly to 2019, the market feels too premature to call it bear market already. We have not seen all typical reversal symptoms: blow-off top, long-term indicators reversing, market complacency. We have not even seen actual upside pullback yet where this 55% drawdown is definitely of abnormal volatility which usually is followed by upside volatility sooner than later. NUPL never went above 0.75 ratio as it always did in every bear market and not only. I’ve seen bull markets and bear markets. I know how they felt. If it is a bear market (which I do not believe it is) it would be very premature one triggered by series of FUD news, which would be very unnatural for BTC.
The way I personally read this entire situation, no matter how hard it may seem to believe it for you so believe it or not, it is over-extended news-driven retracement – a correction with abnormal downside volatility in the environment of all kinds of well-timed (then orchestrated) FUD news: Elon Musk, US Treasury, China bans, Russia ban, FED’s announcement about hiking rates in 2023. All of it caused the market to derisk and aligned well with global markets outside crypto following similar downside patterns simultaneously. As mentioned, I don’t believe FED would be so willing to raise rates at all (explained why in legacy channel). Instead releasing the news might have been their way of dealing to stop recent commodities’ push, especially gold which was doing best in months. Expensive commodities are major issue for global economies. The only way to tackle down high commodity prices is by raising interest rates/threatening to do so to strengthen USD. IMO this entire period of FUD news is only temporary. Notice how oversold BTC is on weekly Birbicator. In past 3 years, we’ve only seen BTCUSD this oversold three times: 1) December 2018 bear market reversal to bull market 2) Q4 2019 – March 2020 (BTC 4-8k USD) 3) Now Every time not long after BTCUSD saw major bounce. That’s what I would bet on for H2 2021. Just needs to get through ugly chop filled with FUD.
Daily picture is at the edge of losing key support – daily baseline (default settings) after rejecting VWAP trendline at 39k. In case of losing the baseline and Breaker Low at 32722 at the daily close, it would flash sell signal with high chances to retesting range lows down to S1 25850. Bulls are not in full power and 90-120k targets are locked until Breaker High 62076 is dominated by weekly close above. VWAP trendlines zone between 38.8k and 45.8k create supply area – a thick layer dominated by bears. Only after this zone is reclaimed (breakout + retest + weekly close over 45.8k), bulls can aim at R3 50719 up to 55k. Daily close above Breaker Low 32722 would give bulls a bit more time to run back.
Middaily flashed sell signal few sessions ago and is currently tapping into lower volatility bands support 30.5-32.1k. Key Breaker Low support is 31555 that once lost could cause cascade liquidations and potential test of S1 27717 support. Price action wise, BTCUSD trades in exactly the same range 30-42k for past 30 days. Middaily default VWAP trendline supply is 42-44.6k which shows the essence of bears and where the bears army hides. Bulls are in a lot of trouble obviously and they’re in danger of losing 30k support but until that happens saying that currently BTC is bearish is simply wrong. It’s neither bullish, nor bearish. It’s just neutral because of 30-42k range. Simple visualization attached below should help you understand that sideways is a choppy pattern full of chaos, traps. It may happen we would see a fakeout with sweeping lows below 30k and rallying back right after grabbing the selling liquidity beneath the lost support.
MTF still in sideways by all means – price action and baseline average. Currently BTCUSD sitting oversold on lower volatility bands in support area with quite a promising divergence forming at the bottom but its not confirmed yet. Momentum is also oversold (orange-colored are inside the bands). Bulls are not safe below the baseline 36.3k. Last bullish bastion per BPRO is Breaker Low 34841 so bulls would need to rush to bring back trading above that level in order to hope for solid upside pullback into range highs. Breaker High 39610 is short term resistance to break for another, final chance to break towards R1, R2 which is 44.1-48.9k region.
Hourly long-length BPRO suggests key level to save bulls at Breaker Low 33436. Bulls need to asap step in and break above 33436 to trigger buy signal potentially for short-term traders. Bulls are in big danger of course. Breaker High 40722 is key to break to bring back short-term bulls in game. Until then it’s neutral or bearish for next days, especially if stays below 33436.
NUPL ratio at 0.447 and therefore my entire past analysis applies here exactly the same way. Here it is in case you missed it: NUPL at 0.447 suggests optimism/anxiety for retails as for the sentiment read. The market is not over leveraged anymore currently as opposed to pre-crash 0.7+ NUPL ratio values. I read that as more bullish than bearish for long-term as the market reset itself and made new space for potential further upside expansion. Just like a car on the highway after running out of gas – at times you have to u-turn to the nearest gas station to refuel your car to continue the journey. The market ran out of gas (over leveraged and overbought over 58k) and now is refueling itself. I hope this picture makes sense to you as I try to simplify for your better understanding.
FEAR/GREED INDEX is expected to nuke again after it starts discounting this morning’s China mining crackdown FUD. Im expecting 12-15 points on the fear side in the next days in case it stays near the range lows. One more time, it depicts how bearish the market has been for the last 30 days.
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