Daily Report – Bitcoin and Market Update (May 25 2022)
The middaily bar chart prints a picture of a sideways movement, trading inside a fixed price range between the 31500 USD and the floor at 28500 USD.
This stands for a consolidation pattern following the market crash and price shock, both coming from the LUNA and UST disaster. In terms of reliability, I would approach such a triangular pattern with a grain of salt for its upwards or downwards breakout.
Typically, while inside the PTSD territory (following a price shock which puts the market price averages out-of-phase), I would rather expect a breakout failure on either side of the pattern, rather than expect a follow-through. Nonetheless, such a pattern and its boundaries can be informative for the essential support and resistance levels – $28500, and $31500 accordingly.
The CTF Trailer Stop level is adjusted down to $32867. As long as this level is not reclaimed by the bulls, the bears remain in charge with the upper hand in the market.
For the larger context, refer to the 1W chart, proving a failed downwards breakout concept, as the failed patterns tend to perfom better in the opposite direction than anticipated.
The MTF chart in the bar form shows potentially promising setup for an upside pullback, recovery in the near-term.
The sideways descending triangle pattern is limited by the descending upwards trend line, acting as a dynamic resistance, as traders choose to adjust their stops or sells along the trend line. Such an aggregation of resting orders could result in a more explosive break, once the thrust comes through. Similarly, in reverse for the support level at $28500.
The longer the pattern takes to form, the more explosive movement typically comes out of it due to the larger aggregation of resting orders.
The CTF Trailer has recently triggered a switch of the sides, in favor of the bitcoin bulls, near-term. The Stop for the bullish advantage is set at flat $28863. As soon as this level is maintained (breaches are allowed, close below is invalidation), the bulls have the upper hand in the market and decisive vote for the next days.
The Level Lines resistances could serve as price objectives for the bullish setup, and they are as follows:
The hourly chart behaves with respect to the consolidation pattern seen in the 4h chart analysis.
The pattern boundaries could be expected to release an outburst and abnormal volatility on the intraday basis, once broken through it. The boundaries are in proximity to the other important support and resistance levels given by the BPRO, which is an additional confirmation from a different technique.
When moving sideways, bitcoin tends to record a lot of noise in the chart. Such a directionless environment promotes mean-reverting systems and trades, based on momentum. Therefore, the BPRO divergence system correctly has anticipated reversals in the short-term a number of times in the recent days.
For this reason, the short-term trends are likely to continue from a level to level, until a major breakout comes in.
In addition, BPRO Level Lines show resistances at:
Meanwhile, BPRO Level Lines show supports at:
These levels could be anticipated to serve as level-to-level references. In other words, when one level is breached, the next one in the direction of the movement
Another day in extreme pessimis from the speculators’ side marked in the calendar.
Such historically long, and pessimistic approach have rarely ever been seen. This exceptional situation potentially brings exceptional opportunity. The worse the sentiment, the more chances of making money on the contrarian (mean-reverting) basis.
Such a sentiment divergence proves an assymetric bet potential, while the history learns counter trading the extreme sentiment leads to profits more often than to losses. If the sentiment remains as bad or worse freshly after the daily close today, I will consider adding more BTC to my long-term holdings on the contrarian basis.
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P.S. Today’s FOMC mintues at 6:00 PM UTC will likely bring enhanced volatility and higher risks closer to the event. Quite often, in the anticipation of news, the markets tend to move upwards, to later sell off on the news release. It can be very tricky to predict the market around the time, as each and every single word, slip-of-the-tongue is going to weigh in on the headline trading algorithms, investors’ sentiment, and so on. Try to focus on capital protection and conservation of profits, rather than trade through this (already big) level of noise.