Daily Report – Bitcoin and Market Update (March 7 2022)
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The weekly chart has presented an unconvincing weekly close with lots of selling pressure applied at the top of the week. Almost all of the bullish rally seen during the first half of the last week was later covered with selling intensification amid the Russia-Ukraine war escalations.
This candlestick formation seems to be a form of an inverted hammer pattern. Yet, accounting the overall uncertainty, I don’t think it’s necessarily reliable. It has confirmed, instead, that the entire bullishness was neutralized intraweek, proving that the risk-on environment is not dominant for now. An attempt of a break above the key 45000 USD resistance zone was rejected.
Bitcoin has never managed to escape the 2021 range inside the 28800-69000 USD region. Structurally, it remains neutral.
The BPRO suggests that the main long-term resistance remains at the CTF Trailer Stop level at $49134. As long as BTCUSD does not establish a weekly close over that level, bitcoin’s dominant movement is sideways or bearish. This implies chances of revisiting the lows of 30000 USD in case the Russia-Ukraine war intensifies.
Notably, the CTF Trailer resistance is additionally backed by the 50-week mean, the dotted curve. It provides additional technical resistance at the $46500 region. Hence, the entire zone 46500-49150 USD could be interpreted as a supply zone.
The BWAP sets a local volume backed zone at the 38200-41500 USD area. Any weekly close below this zone brings higher chances of revisiting the range lows of 30000s USD. Any close above this 41500 USD implies higher chances of retesting the 46-49k USD region, as given above.
The daily chart seems to be presenting a clear instance of a clueless, sideways movement.
Firstly, note the sine curve pattern happening for the BaseLine average. It keeps changing the direction of the swings interchangeably, whereas the volatility seems to be narrowing. It could be interpreted as a contracting consolidation, accounting the averaged movement.
The price action analysis of bitcoin seems to be confirming that the range highs area at $45000 has been equipped with lots of selling pressures coming from the upside. It is yet another piece of evidence that BTCUSD has not been a favorable investment ever since the Russia-Ukraine tensions emerged, as it’s been nothing but ranging or going south with lots of uncertainty. It’s presented no follow-through to the upside and no consequence in the movement. The market seems to be sidelined for now.
The BPRO Bands seem to confirm that thesis too. Note the pulsations of the Bands, similarly to the BaseLine swings. This suggests that the average volatility does not favor any direction whatsoever as of now. It implies that BTCUSD has the highest chances of trading between 35400 USD and 45400 USD region, bouncing back and forth.
The said levels seem to be additionally backed by another BPRO’s indicator – the Level Lines. Adjusted for volatility and price action, bitcoin can see the support levels at $36064, $30772, whereas the resistances are given at the $46116, $52277 levels.
The middaily chart has recently proved a break of a key short-term support level at 40500 USD.
Ever since the breakdown, bitcoin has remained under the control of the bears more than the bulls.
The CTF Trailer implies the main invalidation level at $42449. This line needs to be reclaimed by the middaily or daily session in order to validate a bullish breakout and, at least, a temporary takeover in favor of the bulls.
The BWAP block sets the volume backed resistance to be at 40600-46100 USD zone.
Until the 40600-42499 USD supply is reclaimed, BTCUSD remains short-term neutral or downwards oriented with the room for a decline into the 33000 USD levels.
The MTF chart seems to be attempting to establish a short-term base for BTCUSD.
The BPRO Wave Pivots show off a local instance of a lack of a follow-through in either direction. Instead, one may observe a series of failed breakouts, both on the tops and on the bottoms.
Locally, if BTCUSD fails to hold the support in the 38200-38700 USD region, it risks further downside escalation into the 35000 USD level, or lower.
In order to resolve to the upside, bitcoin needs to tackle a narrow supply region at 38800-39600 USD, and then later break through the thick, brick-like cluster of resistances in the 41300-45000 USD area. The bulls are facing a difficult challenge, as much as other risk-on markets, e.g. large cap or composite stocks.
The hourly chart seems to be ranging in a narrow box between the 37700 USD support and the 39100 USD resistance.
The BPRO Wave Pivots analysis reveals that the main short-term demand area is focused at 37700-38500 USD. It implies, hence, that if BTCUSD records a clean breakdown of this area, then further downside price action could be anticipated. Otherwise, an upwards breakout with a daily close over 39000 USD could potentially lead to the higher levels.
The Wave Pivots imply a relatively “clean” space with little technical resistance all the way until the 4441500-41800 USD zone or 43500-44000 USD. It is vital for bitcoin to keep closing the candlesticks over 39000 USD. A failed attempt of a breakout can result in a pivot and downwards price action into the low 37000s USD, or lower.
Bitcoin: Number of Active Addresses (168h Moving Average)
As glassnode explains, this on-chain metric stands for “the number of unique addresses that were active in the network either as a sender or receiver. Only addresses that were active in successful transactions are counted.”
A quick glance at the trends spotted in the averaged series of data reveals that … there is no trend. Instead, 168h MA shows off a sine-like oscillations with no follow-through. In these terms, it is consistent with the price action of bitcoin.
No vital divergences, warnings, or early signals are produced, as the on-chain wallet activity seems to be pulsating with no concrete consequence in the direction.
Bitcoin has been market again with an extreme fear reading at the fear/greed index scale. Having flashed 23 points on the scale amid the Russia-Ukraine war escalations, bitcoin market sentiment seems to be very pessismistic.
Historically, when the crowds get substantially pessimistic it is usually good time for purchasing.
It rarely ever works as a timing indicator, though. Hence, it makes little to no sense to expect this indicator to decide or inform about the perfect top or a bottom in the market pricing.
The crowds are usually right in the middle of trends, and usually wrong at the extremes. It seems, then, that BTCUSD is getting closer to its bottom, at least gauging on the sentiment.
More details and even deeper analysis will be shared in the exclusive video report channel.
Hope this report of mine helps you build more understanding about the current market situation. Cheers!
God bless you all.
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