Daily Report – Bitcoin and Market Update (March 16 2022)

HTF 12H:

The middaily chart seems to be attempting a breakout to the upside through the main resistance defined by the BPRO.

The CTF Trailer has remained under the bearish control ever since the failed breakout through 45000 USD level. As the volatility contracted, the CTF Trailer Stop has moved down to $41590, which marks the most relevant invalidation level for the ongoing bearish thesis.

Price action wise, BTCUSD is consolidating in a coil pattern, which for its nature is rather neutral. Though, a breakout to the upside or to the downside can result in a measured moved. In such case, the downside target should be around theoretical support at 25000 USD. An upwards breakout would lead towards the mid $50000s levels.

A middaily or daily close through the $41590 level should confirm that the bulls re-gain the control over the market and reclaim the upper hand.

MTF 4H:

The MTF chart displays a heavily compressed price action within a narrow range of volatility. There seems to be a little bit of a “boiling” process behind the scenes, as bitcoin is slowly unwinding the choppy movement.

The BPRO Momentum Bands have started curving up, which implies the average volatility is upwards-oriented. The average volatility implies an expected range of trading to happen within the 37000-41000 USD zone. A breakout outside of this zone could result in a more explosive movement and further continuation in the breakout direction. A strong 4h candle close through the High Band 41100 USD level could result in continuation towards the next BPRO-defined levels near the 43000 USD resistance. A downwards breakout would suggest the retest of 36200s USD or lower.

Furthermore, BPRO Level Lines show resistances at:

45946
42811
40448

Meanwhile, BPRO Level Lines show supports at:

39407
36260

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 can be expected to act as the next “magnet”

LTF 1H:

The hourly chart shows off the BPRO Wave Pivots which visualize the support and resistance levels or zones, based of the most relevant pivots and swings.

The BWAP support block remains at 39700-39800 USD, and as long as bitcoin rounds up above this area, it is quite likely to retest the next local resistance at the 41000 USD level.

A thick, brick-like demand zone defined by the hourly upwards pivots define a potential bounce area at 38900-39250 USD. In case this zone fails, bitcoin may revisit the lower BPRO-based supports at either 38500s USD or 37800s USD.

A violent breakout and a close of a session of the higher time frame through the 41000 USD resistance level could lead to the retest of 43000 USD or higher. Otherwise, a breakout to the downside through the 37800s USD support may imply a retest of the 35000 USD support.

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.”

The NUPL ratio sits at around 0.3858 which historically has favored relatively under-valued or neutral periods in bitcoin’s price history. As mentioned recently, BTCUSD is as under-valued as it was during the bottoming process around the 30000 USD lows in Q3 2021, or at 8000-9000 USD levels prior to the massive upwards breakout.

FEAR/GREED INDEX

As the chart suggests, the sentiment indicates relatively bottom-ish pricing conditions.

The index shows 24 points on the scale, which belongs under the extreme fear category. Historically, buying into the extreme fear has always generated positive returns, better than it was for selling in those conditions.

Naturally, it is not necessarily a perfect timing indicator and it will not show a timed entry suggestion as the RSI indicator would do. Instead, it offers a fair relative outlook for when bitcoin is considered cheap or expensive, on the contrarian basis.

~~~~~~~

The overall contribution of the Russia-Ukraine war has surely contributed to the highly pessimistic sentiment in the bitcoin market, strongly correlated with the equities now. This, combined with the FOMC meeting anticipations of the rate hikes announcement, has resulted in additional bearish sentiment.

That being said, today we are recording quite a rare instance of a trading day. This week, we have:

• FOMC conference: 2:00 PM EST

The FED’s chairman J. Powell announces confirmation/delay of their rate hikes – Russia’s invasion is potentially a comfortable excuse for the FED to delay the rate hikes and blame the war for the further inflation soaring. Potentially, a rate hikes seem to be priced in so the short-term expectations are rather bearish for the equities (and crypto) and J.P.’s confirmation could trigger a minor news-based sell-off. A positive surprise would be the delay of the rate hikes and inflation continuing to grow, which potentially lays the ground for a stronger upwards breakout for bitcoin. One way or another, increased volatility (and risk) seems to be the case for today. Beware

• Triple-witching Friday

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 marks the expiry of the monthly & quarterly futures and options. This is usually a volatility-generating event. It makes sense to expect increased volatility as the markets are nearing the weekend.

More details in the exclusive video report available to the premium subscribers.

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