Daily Report – Bitcoin and Market Update (November 13 2021)
The daily session is trading right over 20-day average marking out the pennant breakout level. Holding the 20-day mean alone is bullish and as long as it’s ascending the price throwbacks are considered bullish mean reversion. In other words, if the black curve In the chart is going up, price declines in the curve territory are considered buying opportunity.
For the pennant chart pattern, Im not the best fan of the breakout look. I’d love more for the breakout to be less vertical and more rounded on the local peak and bottom. Is the breakout valid then? IMO yes. As long as BTCUSD keeps closing days/weeks over 62800 (MA20) it validates the upside breakout target of 85-90k USD regions. First strong daily close below 62800 increases the chances of price retesting 58000s (lower Bollinger Band support).
The way I see it, Evergrande FUD news and confusion didn’t disturb bitcoin’s bullishness or invalidate any of my final rally plans. If anything, it’s potentially slowed down by some hours-days the real breakout. It’s ranging between 57800 and 69000 because of that now and as long as it trades inside this range bound, BTCUSD is neither bullish nor bearish locally. As for any chart pattern, it’s not the pattern that defines its bullishness or bearishness. It’s the context that the pattern appears in. And the context is bullish.
The middaily chart is holding 67k-anchored Volume Weighted Average Price (aVWAP) so far and as long as it does, the next step should be pretty much the thrust phase as presented in the chart.
In addition to the daily chart analyzed above, the middaily shows off crucial volume-based support levels of different timeframes and significance. I’ve listed them below:
Those supports would act as buy-the-dip opportunities. The lower the support in the price chart, the more external FUD it would require to drag bitcoin’s price down there and hence the lower chances it would happen.
In case you missed it somehow, here’s the actual plan for the next months Im watching.
1) $BTC ATH in hours – check.
2) Institutional + retails FOMO – processing.
3) Tech giants->crypto payments – processing.
4) #Bitcoin pulls 150-200k peak
5) BTC reversal day 40-50k drop
6) Ultimate altseason
7) Bear market 2022
8) BTC bottom $10-20k (85% decline, MA200 1W) Dec 2022
MTF chart is showing a failed breakout on top of a range pattern. The range between 58500 and 67000 with a fakeout on top brings the risk of BTCUSD revisiting the range lows area. Failed chart patterns ten to perform better in the opposite direction than expected more often than not (not always though).
Based on the price action inside the range combined with the moving averages shows off local decrease in momentum. It’s minor though so Id not consider that bearish per se. The means are ascending and as long as they are the main narrative of bitcoin is bullish for the next weeks. The only concerns Id have about bitcoin at this moment regard short-term direction. Technically speaking, because of the failed breakout Id expect bitcoin to retest MA200 of 62000 and optionally 58500 as the range floor.
Volume profile analysis suggests that the main local resistance is at 65000 and the moment BTCUSD sees a strong daily/weekly close through this level, it would be followed by an upside pullback into the range highs of 67000 and potentially another attempt of an upside breakout.
The main narrative is bullish, hence I’d not be comfortable expecting too much of bearish price action. There’s a chance bitcoin forms a rising wedge pattern followed by an ultimate short squeeze. It would be typical of bitcoin to perform this way regarding the largely bullish context.
Here’s a visualization for the failed rising wedge pattern which I could see happening in case of bitcoin’s strength shown with a daily close through 67000. Bitcoin has shown these before. Refer back to the chart when bitcoin was trading at 6-8k usd in April-May 2020. Similar failed rising wedge pattern brought massive rally afterwards.
Hourly chart shows off micro-PTSD price action following Evergrande FUD news related selloff. Usually, after unpredicted news related selloff the market behaves more irrationally than regular price action as the traders take time to recover and/or leave their denial after getting liquidation notices. That’s quite a typical pattern occurring after major selloffs.
Because of that, BTCUSD is trading in local range 62.8k-65.6k and as long as it trades inside the sideways pattern it’s not bullish or bearish. It’s just neutral and the context is what matters. The large context is bullish trend and new ATHs from bitcoin. Local context suggests a bottom fakeout pattern which makes it more bullish than bearish imo. As mentioned before, the failed patterns tend to perform better in the opposite direction – here it’s upwards.
I’ve visualized the PTSD breakout scenario. In case my local thesis is correct (the lower the timeframe, the less relevant and the more of the noise it is), we would see an upside pullback into mid 68000s where the main pre-breaker level is. It’s possible BTCUSD retraces locally to retest the range lows at 62-63k again before testing 68000s but as long as we see daily close through low 65000s, this should bring the scenario presented. It would also match the 4h failed wedge concept.
Risk/reward for short-term traders is not workin in their favor as BTCUSD is trading at the mid-range level of the PTSD pattern. Here’s a reminder how to trade the range:
- Inside range trading (buy range lows or sell range highs)
- Outside range trading (buy the breakout retest or sell the breakdown retest
- Do not trade the range at all and wait for the trend to come up.
Bitcoin: Net Unrealized Profit/Loss (NUPL)
NUPL at 0.624 is considered belief stage of the market based on the onchain metrics. Because of that, it’s always worth taking profits the higher the belief goes.
My long-term exit plan regards NUPL > 0.75 to be the time to start scaling out more aggressively of bitcoin. Until it reaches those levels, NUPL suggests it’s worth locking in some profits on the way up, at least partially.
The sentiment is showing off 72 points on the fear/greed scale which falls under the category of greed. A month ago I gave a proper warning to overly bearish traders about how fear/greed index would be showing extended greed period which would sustain even for months until the bull market peaks. Is it necessarily bearish then? Not really. The crowds are always right in the middle of trend but always wrong in the extremes. Despite the index shows extreme greed occassionaly these days, it’s not considered bearish. Instead, consider that a reminder from the market to keep locking in the profits on the way up.
Most importantly, this tendency is rather evidence that the market is right in the middle of trend. And it seems that bitcoin would be in the middle of trend (again, larger context) rather than far extreme. It’s proof of trend’s strength and bullish momentum more than a reversal symptom. Because of that, the next weeks are expected to be bullish and I would never date counter the trend here not to miss out on the 5th Wave of Elliot which is already conirmed. I’ll be discussing it more in the coming days on our free trading congress. If haven’t signed up yet, remember the time is running and the later you join, the more you miss out. Don’t waste your chance and enroll with the link below.