Daily Report – Bitcoin and Market Update (March 26 2022)
The middaily chart shows relatively clean picture of the most relevant levels marked up.
The price action analysis of bitcoin reveals the only resistance cluster that matters in the near-term for the pattern unfolding. Namely, it is 44500-45500 USD region that’s clustering a lot of supply side of the market, that’s been stopping bitcoin from an upwards breakout for the last several months. As long as this supply zone is unbreached effectively, BTCUSD would be forced to remain in the same pattern it’s been staying inside of which for months.
A breakout of the coil pattern measured between 33000 USD and 46000 USD seems to be due for a release. An upwards breakout would result in a measured move to the upside towards the target of 55000 USD region. For that, bitcoin needs a proper breakout retest over the 45500 USD resistance. Otherwise, the downwards potential is not out of cards just yet.
The BPRO indicates that the bulls maintain control over the market as long as BTCUSD does not close a day or a week below the CTF Trailer Stop at $42329. A clean break below that level may imply underlying and short-term weakness, and chances for the mid $30000s retest.
The MTF chart shows a little bit of a resistance at current levels around the mid 44000 USD field.
The BWAP block defines a price & volume backed region of 44300-44600 USD to be the main short-term resistance to overcome by the bulls. If that succeeds, bitcoin could unlock 46000 USD retest opportunity.
The Momentum Bands of BPRO imply that the most relevant short-term volatility range finds bitcoin trade between $41500 and $46000. A strong breakout outside either of these bands could imply in a more powerful and spectacular thrust towards either 50000 USD or mid $30000s, the way I see it.
An ascending trend line is also of some reference to the traders, locally. It provides to BTCUSD a dynamic support line, now placing a point at around 43000 USD, which if broken may accelerate a selloff into the 41500 USD region.
Meanwhile, BPRO Level Lines show supports at:
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 hourly chart shows the BPRO Wave Pivots, which visualize the most relevant support and resistance lines or zones.
Apparently, BTCUSD is compressed intraday inside a narrow range 44300-44600 USD. A strong close outside either of these boundaries can result in further escalation in the direction of the breakout.
Potential resistance could be read at around 45000 USD on the upside with the support reading at 42000 USD, should the market break down.
Typically, bitcoin takes it a bit slower on the weekends, so it would make sense to expect volatility burst coming up around the next week open.
At 51 points on the scale, the market seems to be way more neutral per its sentiment, when compared with the situation from a couple of days ago.
While this is not a definite confirmation, it may serve as a valuable insight in terms of the market expectations about the direction of bitcoin trends. This may reveal, that after bitcoin has managed to break strongly towards the resistance levels of 45-46k USD, the traders have started feeling a little bit less stressed with less of bearish feeling to it. This may indicate that in fact some of the bears have been converted into bulls while looking at the up-sloping bitcoin movements. This may be some arguable hint about the market building the momentum. I read that as a positive sign in favor of the bulls.
That being said, the readings are not in its extremes anymore, as the bitcoin market reads neutral to the traders sentiment. The way I see it, I would refer back to my favorite stance on the contrarian trading:
“The market is usually right in the middle of trends, and usually wrong at the extremes”.
This does give me impression that we are looking at “the middle of trends” part more than “the extremes” now. It would be risky to play against the trend, and against the direction.
Hence, it’s not necessarily a good buying opportunity anymore in terms of contrarian trading, yet it works in favors of those who had used their purchasing opportunities during extreme fear periods.
More insights given in my yesterday’s webinar. Catch up if missed. God bless