Daily Report – Bitcoin and Market Update (May 26 2021)
Daily chart displayed in simple trend form suggests that after breakdown below Head & Shoulders neckline, we could expect the breakdown retest to come. The upside pullback should reach near $50k levels, which when happens is going to be my planned time to scale out of the market bit more aggressively. The orange curve represents 200SMA which shows average price of the past 200 days of bitcoin. One can notice that massive 50% dump on bitcoin broke below the average, which in its own reading is considered bearish. Traders should also be aware that for volatile assets, which bitcoin is, it is likely to have numerous price deviations against the average. For that reason, I would personally consider that a potential threat but not necessarily a confirmed long-term sell reasoning. If we see a strong BTCUSD weekly close over 40k, I’d personally consider that average break nothing more than a deviation. Ugly close below 40k may develop into something potentially uglier – compare with September 2019.
Middaily timeframe suggests BTCUSD has got near the default baseline average and might be about to break out to the upside over the average provided that there’s not enough resistance to stop the bulls. Daily close over 41k would likely trigger upside continuation towards 44k BWAP resistance or 46k long-range volatility band. Breaker Low 40787 is the minimum required for bulls to reclaim to trigger stronger momentum and potentially buy signal on 12h timeframe for the first time since may 12th. As the trend (baseline/bands) has got very steep, it should be just a matter of time until we see this upside pullback into 44-46k and 50-55k areas in my opinion. Usually, corrections appear in ABC three-wave patterns based on Elliot Waves perspective, so provided that we see daily close over 41k, Id expect push towards 44k, retest of 40k, then push towards 50k. Key resistances: Breaker Low 40787 BWAP 44.3k R1 49353 Mean/R2 54.6-54.8k Breaker High 61013 (required to bring back long-term bullish trend)
MTF picture seems to be getting ready for local bulls takeover. The baseline is already getting upwards orientation suggesting that the price of bitcoin on average has started to increase – the dump phase was finished. It seems the the average volatility defined by BPRO volatility bands has been broken and there’s upside pressure for long-term breakdown retest towards 50k. Similarly to the entire dump move kept printing candles in the lower half (bearish) of the volatility bands, now you could know there’s upside buying pressure as long as BTCUSD keeps trending in the upper half of the volatility bands – over the baseline. BPRO flashed buy signal on 24th of May and remains strong and valid so far. Displayed upside pullback scenario corresponds well with what I described in 12h and 1D chart analyzes. If BWAP resistance at 42.4k is broken and 4h or 1D session closes through that level, it would bring confirmation for high-changes of revisiting high 40000s or low 50000s in the following weeks in June. Invalidation of the bullish upside pullback scenario comes in case BTCUSD starts closing ugly candles beneath the hybrid average below 34.4k. Until then, bulls are safe for now. More details as always available in #nc-video-report for exclusive members.