Daily Report – Bitcoin and Market Update (March 14 2022)

By Cryptobirb

HTF 1W:

The weekly bar chart seems to be displaying a consolidation pattern – coil – below the 20-week mean. The price action is still trapped between the boundaries of the 2021 range box pattern. As long as it is, bitcoin remains neutral more than bullish or bearish for its dominant trajectory.

The average performance of bitcoin of the recent 20 weeks implies a fair price of bitcoin at $46213. With the current market price at around 39000 USD, it generates a mean reverting opportunity. A measured move, given a breakout, could result in a potential 12000 USD reversal or downwards continuation. This implies technical projections into either 56000 USD or 23000 USD. Personally, I’m leaning more towards the upwards breakout scenario.

The 7-week BTC-SPX correlation has strengthened by a lot over the last three weeks, ever since the negative low at 27th of February, around the time when Russia invaded Ukraine and the military war started. One may conclude, that the war has caused bitcoin to attach more to the equities it terms of the directions. Hence, it can not be used as an effective hedge against the war, opposing the gold.

HTF 1D:

The daily chart is clearly exposing a contracting consolidation pattern, as bitcoin’s volatility narrows towards an invisible apex. Symmetrical triangle chart pattern or a coil is relatively a neutral chart pattern, that can behave both like a reversal or continuation pattern, depending on the broader market context.

The Baseline seems to be confirming the contraction on the volatility side, as the averaged price of bitcoin seems to be performing sine-curve oscillations between 37700 USD and 42700 USD. Currently, BTCUSD is trading right below the hybrid average, while sitting at the BWAP support block.

The Level Lines show supports at the $30722 and $36229 levels. The resistances are adjusted to $440045 and $52277 accordingly.

HTF 12H:

The middaily chart of bitcoin presents a picture with the bullish or bearish factors clearly displayed in the chart and defined by the BirbicatorPRO. While the direction of bitcoin’s price movements seems to be horizontal, there are still ongoing “battles” in the field between the bulls and bears.

For now, BTCUSD is trading within the BWAP block, which shows a congestion of fair levels backed by the real volume. The zone is defined at 38200-39000 USD. Depending on the positioning of the price action, if BTC manages to get above the BWAP block, this zone could be expected to play the role of demand zone.

The CTF Trailer implies that the bears still have the upper hand and control over the market, at least at this moment. While it does not generate or inform about a sell signal, it implies that bitcoin bulls are at the mercy of bears, not the other way around. The CTF Trailer Stop at 41590 USD is the level, which bitcoin needs to break to the upside and reclaim for further upwards price expansion.

Until then, bitcoin stands a chance to nose-dive into market lows at the 33-34k USD area.

With the upcoming triple-witching Friday this week, we’ll be looking at the expiry of the monthly and quarterly futures, and options. This means that as bitcoin nears the Friday, 18th of March, it may see abnormal volatility spikes and increased risks of losing on the high-risk plays (leverage liquidations, aggressive altcoin plays, etc.)

MTF 4H:

The MTF chart is displayed with the overlay of the BPRO Wave Pivots, showing certain levels and zones that are favored by the bitcoin’s price action.

Locally, there seems to be a lot of congestion between 37000 USD and 40000 USD. Quite a large portion of the candlesticks is of indecision seen as either the little-bodied candlesticks, or long-wicked candlesticks with the wicks on both sides of the body.

Besides, the most relevant levels defined by the BPRO are: 38130 USD and 42340 USD, playing the roles of support and resistance accordingly.

A breakout to the upside through the 42340 USD resistance could unfold continuation into the 45000 USD resistance. On the other hand, a breakout to the downside through the 38000 USD support could imply a 35000 USD retest.

LTF 1H:

The hourly chart represents price action of bitcoin with a lot of noise trading going on in the horizontal direction. Excluding several traps or fake breakouts on the downside or upside, bitcoin seems to be trading horizontally most of the time.

Price action wise, I see the main levels defined by the main pivots seen in the chart as follows:

Resistance #2 42591 USD
Resistance #1 41672 USD
(Resistance #3 39300 USD)

Support #1 38244 USD
Support #2 37169 USD

A breakout and close of a higher time frame session outside the levels in the direction of the breakout could result in further continuation to the levels at the extremes.

As mentioned, the triple-witching Friday is happening this week. There are only four triple-witching days in the year. Those are the third Fridays of March, June, September, December. This could imply volatility (and risk) spikes. It makes sense, hence, not to be over exposed to high-risk positions around that time. This could be a tip from the market itself not to open any new risky altcoin positions, or leveraged bitcoin bets.

NUPL:

As CryptoQuant explains: “Net Unrealized Profit and Loss (NUPL) is the difference between market cap and realized cap divided by market cap. Assuming that the latest coin movement is the result of a purchase, NUPL indicates the total amount of profit/loss in all the coins represented as a ratio. It could be interpreted as the ratio of investors who are in profit. Values over ‘0’ indicate investors are in profit and an increasing trend in value means more investors are beginning to be in profit. This phase indicates the increasing reason to take profit which leads to an increase in sell pressure.”

Currently, NUPL at 0.36 implies that bitcoin is at similar risk levels where it was back in Q3 2021 bottoming process, or when bitcoin was trading at 8000-9000 USD in 2020.

Hence, it seems apparent that there is a lot of upside growth potential on the on-chain side, assuming no fundamental factors like nuclear bombs disturb it.

FEAR/GREED INDEX:

For the sentiment part, it’s worth noting the current index value at 23 points. It sets it under the extreme fear category.

Historically, extreme fear territory has provided better buying than selling opportunities for bitcoin investors. While it requires patience – the effects are not immediate, I expect no different this time.

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God bless.

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