Daily Report – Bitcoin and Market Update (May 28 2022)
The middaily chart has breached the floor of the descending triangle pattern recently thrice. Despite consecutive closes higher, above the support price level, I would argue that the support level at 28500 USD has weakened.
With a strong equities close of the week in green, bitcoin has proved lag this time, accounting the overall macroeconomic instability and inner cluelessness of BTC on its own. As the BTC chart pattern has weakened its base, I would argue that the short-term potential implications may call for a lower spike into the 26-27k USD regions. However, it is not given and should not be taken for granted.
While waiting for the pattern to unfold, the CTF Trailer has adjusted the main breakout threshold downwards. The Stop invalidation level is now at $31264.5. This implies that with a strong daily or weekly close outside this resistance bitcoin may get a strong upwards trigger. In such case, bitcoin bulls would re-gain the control over the market and have the decisive vote for the short-term directions. This could mean that the short-term supports would be more likely to be held, and resistances more likely to be breached.
Until that happens, the bears have the higher hand and control the situation, with chances of seeing lower prices, as mentioned.
The MTF chart reveals that bitcoin continues to chop around the mean prices of 29000-30000 USD with a lot of noise, and an overall inability to follow through toward either side.
However, the volatility has been shrinking more and more over the course of the recent days and weeks. Such a volatility decline may suggest that the market has recovered from its PTSD period following the LUNA & UST crash and price shock for bitcoin.
The Level Lines resistances could serve as price objectives for the bullish setup, and they are as follows:
The hourly chart gives a clear idea of how clueless the market is right now in terms of its decisive direction. In fact, it’s lacking the direction and chops from bound to bound in a more or less chaotic way.
Such a market behavior typically brings more sense to using mean-reverting systems, such as the one given by the BPRO Divergence System. The recent swings have been well anticipated by the Divergence marks, as the market continues to chop between the high and low thresholds.
For this reason, until the breakout actually comes, the short-term trends are likely to continue from a level to level.
In addition, BPRO Level Lines show resistance at 29563, whereas the main support lies at 28276.
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
The fear environment continues while bitcoin prices move in a choppy sideways.
Typically, it is quite a natural reaction from the market speculators’ side, as they gradually lose hope that the market will ever improve, squeezing them to close off their long positions. This works as a positive feedback loop, where the short-term speculators tend to show off the regret bias, regretting they’d ever entered positions, and adding to the revulsion state of the market.
With the 13 points on the fear/greed index scale, this marks yet another day in historically low readings for the market sentiment. The surfaced thought is that the market is simply dead, and never will recover from the lows.
While the index is not a timing indicator like momentum oscillators, RSI, Stoch, MACD, etc., it can still serve a portion of valuable information on the contrarian basis. The more extreme fear induced in the market due to the perception biases of market participants, the closer to the reversal market gets. Typically, this generates buying opportunity as the patient traders buy out the sell-offs coming from the panic sellers.
Have a look at historical reversals seen in the chart and accompanying sentiment. This may help.
More details and full analysis both given in my latest market review – check out the link below.