Daily Report – Bitcoin and Market Update (May 18 2022)

HTF 12H:

In the middaily chart, bitcoin continues to trade within a sideways trajectory, following the last week’s crash on LUNA and UST. Typically, this leads to a form of a PTSD environment when the market needs time to recover its “technicality”, as well as traders find time to shake off the denial.

Clearly, the main breakout threshold remains at the CTF Trailer Stop level at $33639. As long as this level is not reclaimed on the daily time frame with a close above, I would argue that the bulls are on the losing side of the trend.

Local BWAP area 29.8-39.3k USD combines price and volume factors to bring the main short-term area serving as a supply or demand, depending on the position of the price action itself. The market has recently failed to break and trade above this area, which proves local weakness and chances for tagging the long-wick territory, nearer the 28000 USD zone.

For as long as bitcoin moves inside the PTSD zone or sentiment, I would not expect any explosive moves, but rather liquidity hunting on both ends of the pattern.

MTF 4H:

The MTF chart proves a clear instance of sideways, clueless movement between well-defined boundaries.

It’s helpful to observe the Momentum Bands indicator of the BPRO show the demand at 28.2-28.6k, and the supply zone at 31.4-31.8k USD, defined by the volatility indicators.

For a more spectacular and directional movement, bitcoin would need to leave outside either of those bands with an abnormal volatility reading. Such a volatility breakout, if a session closes outside the band, could indicate a new trend resurfacing in the direction of the breakout.

The CTF Trailer Stop remains at $31058, and bears will hold the upper vote in the market, until the bulls break and close above the resistance.

LTF 1H:

The hourly chart displays short-term Momentum Bands, moving in the sideways trajectory, while below the BWAP block support.

A clean close below the 28800 USD could ignite a more powerful downside reaction with an attempt of a breakout. If such occurs, bitcoin could follow through toward the next support at $28617, or lower regions below $28000.

Otherwise, a breakout above the High Band at 31000 USD would most likely suggest a potential retest of the higher Level Line resistances at $33229, and $35499, accordingly.

FEAR/GREED INDEX:

Fear saga continues, as the speculator sentiment crawls in the depths of pessimism, following last week’s crash in the market.

Let me re-circle to my previous statements, where “we all undergo emotional processes and perception biases, which distort our reality reading skills, due to cognitive biases – faulty reasoning, human errors, and emotional biases – driven by fear and greed. Regardless of the type of the bias, every time such a bias can lead to a mistaken conclusion regarding the market performance and cause irrational decisions.”

Historically, buying into extreme fear region has been more profitable than selling off or short selling into the depths of bearishness. I don’t think this time is different. Patience and rationale will prevail.

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God bless.