Daily Report – Bitcoin and Market Update (March 27 2021)
Middaily picture brings clean fakeout confirmation. Local range/descending triangle pattern got a breakdown that tapped long-range bottom volatility band of BPRO and then printed strong candle close back inside the broken range floor. Usually, failed patterns tend to perform much better for ROI, than the regular ones. Based on my yesterday’s webinar and multiple updates in #nest-club, I’m expecting mean reversion here, which means BTCUSD should return to the broken average – baseline of high 57000s. Personally, I’m strictly following BPRO trend change indications, which is why I’m still sitting 50% tethered on my short-term portfolios. I didn’t sell out fully when BTC flashed most recent “sell signal” due to market being NOT in a downtrend, but a range instead. Range by definition means sideways, lack of trend where any directional movement was missing. I would have tethered up fully if the signal had appeared in a factual downtrend. Any sideways is usually full of traps, fake breakouts – which you’ve just seen in practice. I choose to remain half-tethered until BPRO proves otherwise with a buy signal confirming high chances of uptrend continuation. Despite local choppy range full of liquidity hunts, I still think BTCUSD Is on its way to 90-120k and we should expect intense volatility approaching in next months. BPRO prints BVWAP support at 48.3k and 50.4k (long-range downside volatility band). For the bullish narrative, Breaker High of 58322 must be reclaimed. Medium to long-term resistances are as follows: 65.4k, 70111, 77643, 89812.
Current 4h chart displays BTC tackling BVWAP resistance 55.5k and if closes above, it should next retest 57-58k zone. It would match the overall concept of 12h baseline mean reversion, which I mentioned above. Those levels align well with 4h momentum waves resistances in decent confluence. Current support that needs to be defended by bulls for upside continuation, is Breaker Low of 53024. The truth is, that as long as as BTC remains below the ATH ~62k, it’s inside a very tricky wide range 43-62k. This low-momentum movement is not convincing to me from the technical point of view as it bears the risk of a bigger medium-term distribution process, similar to the ones from e.g. Wyckoff distribution cheat sheet. The difference is, that I would not expect downside reversal to 10-20k range – like many people will be predicting if the cheat sheet completes, but instead I’d expect a fake breakdown of 43k level similar to the recent one on 12h, but of greater scale. I’m strictly referring here to my yesterday’s webinar and fakeout scenario presented in the attachment below. Many people would call current downside movement a legit chart pattern – bull flag. I choose to distrust this pattern to play out like typical bull flags in any uptrend for one reason – the uptrend here looks locally exhausted and of too low momentum to be credible enough for me. For that reason also, I wouldn’t be surprised if we see a decent-looking breakout of the “bull flag” followed by instant heavy distribution dump.
Mentioned scenario with fake breakdown on the downside inside wyckoff-looking distribution range:
One way or another, I’m trading based on my adjusted trading system of default length trend-following BPRO indications. Short-term trading portfolios are obviously different strategy than my long-term holdings, which I’m only going to cash out fully within next months based on the onchain and NUPL chart attached. My overall thesis remains, so that we should slowly but surely realize profits and follow process of exiting the market and moving capital to undervalued assets – commodities.
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