Daily Report – Bitcoin and Market Update (May 17 2021)
Weekly session closed as bear-dominated candle. Weak demand showed up below 46k but we’re talking about first near-length BPRO sell signal on weekly since November 2020. It’s a very dangerous signal. It’s NOT bear market for sure (provided that military conflicts don’t escalate into WWIII right away) but instead it might have flashed signal about upcoming weeks-months of low momentum chop similar to Q3 2017. Weekly BWAP support at 43k got tested with actual low established at 42.1k for now, which might be the low of the week. It may happen that the sell signal is going to get neutralized by a buy signal anytime soon but for now special caution needs to be taken. 35% drawdown from the peak is what usually makes BTCUSD reverse. Statistically 30-40% retracements are normal for bitcoin and as long as its in bull market, its perfect buy-the-dip opportunity – at least for short-term bargain hunters. BPRO suggests that key Breaker High resistance to be reclaimed by bulls is 62584 and anything below is considered neutral/”bearish”. If BTCUSD doesn’t sustain trading over S1 support 45241, then the next support is S2 37796. Long-term traders have nothing to worry about for now imo, while LTF-MTF traders may see more weeks of dull price action anywhere between 38k and 65k. As long as bull market lasts, any 30-40% dips are for buying.
Daily closed as high wave doji type of candle after a daily sell signal. There’s no question about that BTCUSD has been in big struggle since last week started while Elon Musk accelerated the selloff indirectly. Indirectly as he could not be selling personally, but bots and algos trading based on Elon’s sentiment detected “bearish” narratives and triggered instant market selloff. It is not a speculation whether or not such bots exist and work. It is an unquestionable fact these days and nothing that should surprise you as traders. Daily BWAP support at 44k has been defending intraday price action so far. BVWAP trendlines suggest that the entire 40-50k layer is in fact a demand cluster based on Volume rather than a selling area. In case of a 4h or 12h candle close below 43k, we may see a retest of lower BVWAP trendline at 39k. Breaker High 62076 needs to be reclaimed by bulls for medium-term trend to become bullish again. Otherwise, it is still the good old 43-65k low momentum sideways with a scenario of sweeping 43k lows which came to realize today after my numerous reminders in video reports. Key daily volatility supports are 44088 and 36833-38710 area.
Middaily has just closed as a beautiful hammer candle after sweeping the lows of the range. IMO this is the scenario I had been talking about for many months already: sweeping the lows, making everybody believe it’s extremely bearish/bear market (fear/greed at extreme fear unseen since covid crash), overall FUD, 35% retracement. To me it looks that bottom -if not in already – is very close price and time wise. All the checkboxes for reversal are pretty much checked outside the momentum itself as its been neutral for past 3 months. Now bulls need to re-build bullish momentum from zero. Lots of convergent signals for local upside reversal pullback towards the mean reversion levels ~53k. BPRO is on sell mode while on oversold volatility and momentum. Breaker Low of 52973 needs to be reclaimed by bulls to unlock high 50000s levels again. Breaker High 61013 needed to establish new bullish momentum which could push the markets towards 90-120k later this year.
MTF picture is definitely looking not bullish. Quite a straight line decline for the baseline (hybrid average) hence you could expect that the moment BTCUSD breaks above and retests successfully the average, it would work just like with regular trendlines. This average actually is a trendline. Note how the volatility bands contracted on the downside decline – from 50k to 65k bandwidth last week, to 41-54k (15k to 13k volatility size). Current BWAP resistance sits at 50k and that very level is crucial for bulls to break above again so that BTCUSD can proceed to retest high bands at 53-54k. Definitely it is a tricky market right now, very close to the reversal while the momentum is still on the bearish side. Just like with a big heavy track – to return, it firstly needs to slowly break and stop, and only then can it start reversing to the opposite direction. Same way it works with BTCUSD. It will take time for it to reverse locally, it’s not instant. Instead, you will see many liquidity hunts, traps for over leveraged longs and shorts, fake breakouts, failed chart patterns, etc. It’s still part of this dull 43-65k low momentum sideways which lasts since February. Happily, it’s soon coming to an end in the form we’ve known so far as statistically, BTCUSD doesn’t have a lot of long-term sideways lasting over 3 months. More short-term retracements instead, which suggests that the currently ongoing sideways is already over-extended. Bulls step up back in the game only after reclaiming Breaker Low 47807.
Hourly chart in choppy decline with two main interest areas: demand side 39-42k and supply side 49-51.6k. If trading BTCUSD short-term, then buys should be laddered inside the demand zone and sells should be laddered inside the supply zone. Hourly buy signal triggered on long-length BPRO settings here but there’s definitely not been enough of institutional demand for BTC so far at these levels just yet – no heavy market buy candles. Breakout over supply zone would suggest upside continuation towards the Breaker High 58728. Otherwise, should be getting ready for local upside reversal. Definitely not a short territory while it’s too early to buy. As you know, Im personally waiting for 12h mean reversion 53-54k to exit on an upside pullback as Im a bit stuck with my positions but the nature of volatility and negative sentiment suggest that we would see upside reversal in the following hours-days. Also, as you know, we’re celebrating the last day of our virtual trading congress. If you enjoyed all amazing shows we have unlocked for you so far, you can still claim up to 40% discounts if chosen to pay with crypto for any yearly, 4month or monthly membership programs. To ensure you secure super high discounts for long-term, consider yearly programs. Otherwise monthly subscriptions renew at higher prices. This is only valid for limited time as long as the congress offer lasts and you must have noticed we are not giving high discounts too often anymore. If you enjoyed this bitcoin market report and want to continue studying trading with the largest and most reputable trade group since 2017, that’s my last calls so you can claim your discounted seats.
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