Daily Report – Bitcoin and Market Update (November 15 2021
The weekly candle closed basically as a new ATH for the line chart. It’s yet another signal and confirmation of macro bullishness as the market keeps making new higher highs. Reliable price action based feedback is what the market gives us. 50-week average per the orange curve keeps ascending which is unquestionable sign of the market strength and upwards trend pushing forward.
The momentum is overbought while the trend remains strong. The same way that the sentiment can remain unchanged for weeks as extreme greed, it’s normal for BTCUSD to remain in the overbought condition for same weeks or months. It’s the same strength signal read in different market indicators. Aka confluence.
The large symmetric triangle chart pattern aims at 85-90k USD for its breakout target. It aligns well with the Fibonacci based extension. Again, confluence rather than a coincidence.
Significantly, 65.5-69k is local resistance area or supply cluster which in case we see a weekly close through, it would ignite the spark of the vertical rally for bitcoin and breaking through the new round number milestones like 70k USD, 80k USD, etc.
There’s not a single thing about this weekly chart that I’d see any macro weakness for and tertiary fluctuations of intraday price action is just irrelevant market noise. Focus on the trend.
The daily sessions have been declining for the past few days after faking out $67000 breakout. The thrust breakout candle was of power and strength while the Evergrande news disturbed the market temporarily and what we’re seeing in the chart is the direct result of it. As mentioned before, it did NOT change the overall layout and long-term trend in the chart. It’s just managed to disturb it momentarily to take more time consolidating.
What’s worth noticing is that FUD news events like Evergrande or China bans seem to be well orchestrated on the global scale and don’t be misled – in financial world there are no coincidences. There’s no room for hundreds of billions of dollars worth of mistakes or coincidences. It’s game theory and that’s how they flush the liquidity and clean up the market before major movements. Usually – upwards. Some of you may think that I’d read every news as bullish no matter what it says. It couldn’t be further from truth. Those who’ve stuck with me and The Nest for years since 2017 know very well that I got my public recognition for calling bear market floor levels of 3-4k usd 11 months in advance in 2018. You can trust me that when the market gets bearish, I’ll be the first to tell you about it. Will bitcoin be going up forever? Certainly not. For now, enjoy the bull run.
Local key fakeout levels that need to be reclaimed by bulls with a daily or weekly close through is 67000-67525 as that’s clearly where the supply started kicking in. Let the bulls show the strength where there is a weakness shown now and the rally catches on fire.
Bullish pennant I’d mentioned and warned about potential fakeouts for is not really pennant pattern anymore – it’s got invalidated. Does that mean the bullishness got invalidated? No. It’s apparently just different pattern than expected and it’s natural for the patterns to evolve, especially in as highly volatile markets as crypto. Now that it’s failed it’s rather following the previously mentioned (on 4h charts breakdown in my latest reports) potential rising wedge pattern of not-so-steep angle. Optionally, head and shoulders continuation pattern (it’s not the pattern that is bullish or bearish, it’s the context).
Bollinger Bands seem to validate the thesis above as potentially likely as the potential pattern levels would match the upper and lower Bollinger Bands levels. Currently, bitcoin is trading with expected regular volatility between 59.1k and 67k that’s where BTCUSD is expected to trade for 95% of the time now.
The middaily chart is showing local weakness on the short term basis as a result of the said orchestrated Evergrande FUD news with the fakeout on top. It’s slowed down short term momentum enough to switch the market from the upwards orientation to the sideways direction temporarily.
BTCUSD is currently trading below it’s local 57k-anchored Volume Weighted Average Price aVWAP of 63436. As long as it is, the next support levels based on combination of price and volume are:
As mentioned recently, 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 anytime soon.
Also, In case you missed it somehow, here’s the actual plan of mine to time my exit strategy well.
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
We’re processing the points #2 and #3
MTF chart is displaying the said rising wedge pattern which has just flashed a candle looking like a downwards breakout. Potential breakout target takes us into 58.7k based on the volume profile incorporated in the chart.
BTCUSD is locally trading below it’s 200MA while tapping into exact PoC (Point of Control) right at the largest volume shelf support. That’s the area with the largest volume which means it’s of high technical significance. If I was a bear (which would be pretty stupid here), I’d not dare shorting the largest buying volume spikes showing support in 60-62k area. That’s a volume based demand zone and risk/reward for shorting here is rather poor. It doesn’t mean its impossible to make money of it though.
Watch out for the rising wedges as bitcoin more often than not tends to fail them on the downwards breakouts. That’s where overleveraged bears end up being liquidity providers to the whale longs knowing that the shorts would be coming. And failed chart patterns tend to perform better in the opposite directions than expected.
Hourly chart is showing a few significant levels based on price and volume within the local micro downtrend. The levels marked with horizontal lines stand for what I call to be “pre-breaker” levels showing off here the last bullish bastion before major breakdown candles. These levels are assumed to have special technical significance and importance, because that if the result was a major downbreak, then it means there must have been a massive support breakdown. This pattern consists of two candles: one small candle (spinning top or doji) and a breaker candle (large volatility). The bigger the breaker candle, the more important the support had to be.
Based on the polarity change principle, broken support turns into resistance. Hence, the pre-breaker levels should work as significant resistances on the way up so expect higher volatility and more liquidations around these areas.
These level seem to align pretty well with aVWAP levels defined by price and volume.
Key supports were given in the previous chapters of this market report. Key resistances are as follows:
Bitcoin: Net Unrealized Profit/Loss (NUPL)
As mentioned in the earlier chapters, the evergrande news flushed the liquidity forcing liquidations and clearing the market. As a result, the leverage exposure on the market coming from unrealized profits (NUPL) has decreased.
NUPL at 0.619 is showing off a case of local short-term potential divergence between price action (higher highs) and NUPL (lower highs). Yet, I’d suggest caution in taking far-fetched conclusions over it as it’s still consolidating for both cases.
The onchain analysis is not giving any major reversal signals so far. Hence, my plan to scale out aggressively over NUPL crossing 0.75 hasn’t changed.
FEAR & GREED INDEX
The sentiment and overall herd’s consensus is greed at 71 points on the fear/greed index scale. As mentioned before, in this very case the market’s staying inside the extreme greed or greed environment is rather a confirmation for the market strength on the major timeframes. It doesnt forbid short term downside fluctuations certainly and becuase of that, whenever the market hits greed or extreme greed zone, it’s usually a zone better for taking profits than buying. Buying is what happens inside the extreme fear area. Remember that crowds are always right in the middle of trends but always wrong at the extremes.
The more aggressive the crowd becomes about greed or fear, the more intense the signal coming out of it and the better selling/buying opportunity it becomes. I personally keep realizing profits and slowly moving my money out of crypto as I’d laid out many times in the past months in my personal trading journal channel, reports, webinars or interviews. I’m going to dedicate decent amount of time in the upcoming days of our 14 Day Free Trading Congress to help everybody realize as much profits as possible before the bear market kicks in, because when that happens, it will be too late to realize the profits already. If you’re not one of more than 30,000 participants to our free trading congress, stop missing out and join free asap with the link below. God bless and see you there.