Daily Report – Bitcoin and Market Update (May 4 2022)

HTF 12H:

The middaily chart has seen a promising session close, giving a brief partial confirmation for the wedge pattern breakout. However, the bearish case has not disappeared just yet.

Firstly, the wedge pattern has formed and just seen its candle breakout outside the upper bound – the descending trend line, marking dynamic levels of resistance as the traders continued to lower the asks down the slope. The first successful close is a promising trigger for a potential breakout trade. However, one needs to acknowledge an overall lack of trend and order in the movement over the past few months. Caution needs to be raised.

Maintaining high correlation to the large cap equities, the latter show off quite a poor performance – over many decades, the market closed the 4th of May only ~38% bullish and ~62% of the time in a bearish manner returning negative result. The seasonality does not favor bitcoin on this day for the current context, relying on the historical records.

Then, the CTF Trailer Stop remains at $41198. As long as bulls do not reclaim this region, the bears maintain the upper vote in the market. The bulls need a close of the day or week outside the said Stop level $41198, in order to re-gain the control over the market. If that is the case indeed, then the potential price objectives at $45478-$46572 activate.

MTF 4H:

The MTF chart has recorded a local bounce off the $37500 support with a +3.25% increase.

Nearing a local resistance area at 39000 USD, bitcoin will need a stronger push outside the prior pivot to ensure there’s enough of momentum to pursue higher targets.

The CTF Trailer Stop rests at $39527 and is the main level needed to break by the bulls, in order to re-gain the upper vote in the market over the near-term time frames.

The Level Lines supports are marked at:

38703
37543

Furthermore, BPRO Level Lines show resistances at:

42892
40220

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

LTF 1H:

The hourly chart shows a local consolidation movement between the 37500 USD lows and the 39000 USD highs.

The Baseline average ascends quite sharply, which is indicative of the near-term momentum strength in the upwards direction. At the same time, it provides mean support at 38600 USD level, which if broken to the downside could lead to further selling pressures.

The price action based support area is defined at 38000-38100 USD, whereas the resistance region is formed at the 39000-39200 USD highs. Those levels could act as form of magnet pulls in the direction of the breakout. A clean break outside the resistance area with a follow-through to the upside on a higher time frame could lead to reliable confirmation of higher price objectives to come tested.

Bitcoin: Active Addresses (EMA 14)

As CryptoQuant explains, the metric stands for “The total number of unique active addresses, inclusive of senders and receivers.”

The EMA14 remains relatively flat, less noise fluctuations. No visible trend or change in the neutral trajectory has been spotted so far.

Hence, this metric is useful in noting that it aligns well with the price indications as the marked has remained flat for the entire 2022 to date period.

Traders could search for triggers and spikes in the active addresses on the on-chain side, which could be indicative of future price movements to an extent.

FEAR/GREED INDEX:

As the sentiment continues to weaken at the 21 points on the index scale, the speculators maintain hopelessness and overly bearish, pessimistic expectations for the next days and weeks of trading. Over pessimistic approach to the markets typicall leads to selling off right into the bottomish price regions, more often than not.

Especially, if accounted for today’s FOMC meeting at 2:00 PM EST where the majority prices in expectations for 75bps rate hikes for the upcoming period of May and June, if the real words from the chairman J. Powell happen to be more dovish (e.g. 50 bps instead of 75bps, or more optimistic outlook shared, slowed inflation rates, etc.) this could lead to somewhat of a relief rally in equities – and in bitcoin/crypto.

Regardless of the speculations, sides taken on the votes, bets for what the FED’s stance today is, caution is advised. Over trading through the news sharing period typically leads to sore under performance and painful losses. Highly recommed to avoid these risky activities at the time knowing the the market has moved sideways for bitcoin – no trend or tendency is clear.

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