Daily Report – Bitcoin and Market Update (May 24 2021)
Weekly closed at 34.7k marking the demand beneath down to 30k. It was rather support territory of bulls which defended the lows with lots of whale liquidity hunting. You could notice aggressive buying series around the lows of 32k. Quite a strong week opening today as BTCUSD is currently trading at 37.7k. The biggest downside volatility ever seen on bitcoin may finally see some relief price action towards the average around 50-53k, which in my opinion is quite essential to see and could come only after flipping 42-43k local resistance into new support. BPRO flashed first sell indication week ago and remains on the bearish side of the average. This does not look like a top pattern but more like June 2019 repetition. No onchain or fundamental indicator is showing the bull market has ended, so it’s simply wrong to assume we are in bear market. Insane and irrational fear of crowds selling off supports, combined with well-engineered FUD campaign (Elon suspending crypto payments, China bans, Russia ban, etc.) all seem to provide good buying opportunity anywhere near 30k for now. Breaker High 62584 is key level to reclaim by long-term bulls to unlock 90-120k, which Im almost certain is going to happen within the next months. Now intraweek price action should still remain in PTSD period with lots of volatility, liquidity hunting, ranging patterns and lack of overall direction. As long as BTCUSD trades over Breaker Low of 26222, long-term bulls are safe.
Daily closed as another candle of long candles with long lower shadows signaling intraday demand beneath 34.6k adding confluence to wider range 30-36.7k. IMO the bottom is in, at least for now, and should remain like that unless military conflicts escalate (Israel – Palestine/ WWIII). Any sells or shorts into the demand area would rather serve as liquidity providers rather than good risk/reward and I’d call them bottom-sellers personally the way I see it. Price action wise, the market made long-term Lower Low, which I would expect to follow up with Lower High anywhere near 50k. Be it due to mean reversion, oversold momentum, range pattern breakdown retest. Key resistances based on volume and volatility are: 39k, 44k, 48k, 50k. Again, the overall market context reminds me of some form of June 2019 repetition but faster as we’re way higher up the market cycle phase. Long-term bull trend is not continued until Breaker High 62076 is reclaimed and until then BTCUSD remains in sideways or bearish trend MTF-HTF but NOT a bear market.
Middaily confirms thoughts shared in the daily commentary. Key levels for bulls to reclaim price action wise are 42101, 46000 and final boss target 55.9k yet Im not sure BTCUSD is capable of reaching that very level that fast. Volatility bands saw extreme downside deviation against the average volatility bandwidth which usually serves as a reversal confirmation and heavy buying opportunity, at least for short-term. I’d stay extremely cautious and rather keep scaling out of the market around local highs as my past months plan follows. Bulls would gain a lot of momentum and volatility on their side only after closing weekly candle over 50k. I’d expect Q3 to become rather dull, boring and no fireworks like new highs or new lows (although sweeping lows below 30k is still possible to squeeze over leveraged longs and shorts for massive buys). I’d still expect Alibaba, Facebook, Google, etc. to announce they accept BTC and other cryptos as additional catalyst later this year, probably at the final stage of this bull run. While Q3 would rather be movements inside big range 30-65k, Q4 will be the final game imo. Similarly to what we saw in 2017 November-December, I would see everything bubble to appear where BTCUSD pumps to new ATH ~2x past old ATH at 65k, ETH 10k, LTC 1k, etc. DeFi got smashed so it would make a lot of sense if it joins the final party for ultimate altseason right before the market gets overly euphoric to reverse to and initiate 1-year long bear market.
Local downtrend seems to be getting ready for an upside reversal towards high 40000s as long as we see a daily session close over 40000. Price action is tapping into long-range BPRO volatility band and if we see a solid close through, then it would confirm short-term buy signal based on BPRO 4h default settings. Local BWAP resistance is at 42.8k and that’s where I expect a local throwback towards 38-39k provided that we see a breakout presented in the chart, which is likely. For short-term bulls, it is required to defend Breaker Low 34059 territory. Key resistances on the upside: R1 41211 R2 45639 Mean 50399 R3 52792 Breaker High 58141. If we lose Breaker Low in an ugly manner with daily close below 30k lows, S1 26906 is the next support.
Hourly candles at local resistance of 38k inside overbought volatility short-term wise. Mean reversion would suggest we may see BTCUSD retest low 35k anytime soon before further upside expansion. For the scenario drawn in the picture, BTCUSD needs to close a daily candle over 40k as that will confirm that hourly timeframe is pushing the volatility in the upwards direction – typical volatility breakout trade like for Bollinger Bands or Donchian Channels. Breaker High on 1h is 47061 and that is the level which needs to be reclaimed by bulls to continue to mid 50000s. I would not expect that to happen in one go though. Instead, I would see BTCUSD to go to 42-44k supply, then 46-47k to complete the big range breakdown retest. Breaker Low is 34660 and that level must be held in order to secure the lows. Otherwise, it brings more chances for visiting 27407 and the lower it is allowed to go, the bigger threat to the bull market state.
Onchain analytics per active addresses (remember my bearish divergence chart? Higher highs PA vs Lower Highs 50MA of active addresses) and of liquidity pool (NUPL) suggests there are rather very low chances that bull market is over. I personally see very alike repetition of what we saw in 2013 and 2017. This liquidity indicator is my ultimate macro top/bottom indicator and it works in perfect confluence with other indicators. Fundamental analysis view on BTC hasn’t changed. Bitcoin has not become useless overnight. It still represents the same fundamental value and utility which got disturbed by short-term secondary fluctuations. It does not impact long-term perspective or existence.
Sentiment analysis points out insanely rare buying opportunity on the market right now. Only a few times in history BTCUSD has only had this low sentiment on Fear/Greed Index scale (10). It only appeared on major bottom reversals in the past and the same is expected now.
One needs to understand that it’s impossible to perfectly predict bottom or top – it’s more of a lottery than skills in that case. Instead, one needs to decide what is cheap and what is expensive. When crowds fear to buy and keep selling in panic, that’s usually oversold and overly cheap, which means that at one point prices would return to “normal” / mean. In my opinion, knowing that bull market is NOT over, I consider that beautiful buying opportunity. As a matter of fact, probably the last buying opportunity for BTC of this kind in this bull run which is still 70% complete to my mind. Sentiment shouts BUY THE DIP clearly and strongly.
Intermarket factors also favor inflation-hedge types of assets like commodities (especially gold, silver). BTC being deflationary asset of limited supply and increasing scarcity (halvings, mining difficulty, public awareness/demand) works as a great inflationary hedge. The macroeconomics favor bitcoin for the next months as FED confirmed the inflation would soar.
Long story short, bull market is not over and it’s great buying opportunity. Invest at your own risk tollerance. More details in #nc-video-report channel available to exclusive members.
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