Daily Report – Bitcoin and Market Update (November 17 2021)

By Cryptobirb

HTF 12H:

The middaily chart has shown a lot of local temporary weakness within the range 57.7k-69k for total of 15% decline off the highs. Is that relevant from the higher timeframe point of view? Nothing else but a short-term buying opportunity before the final party starts. 15% retracements are classical short-term ranges for bitcoin’s corrective waves next to 30-40% MTF corrections and 50%+ HTF corrections.

From the price action point of view the ongoing retracement is nothing but a noise as the market is not trending currently – it’s going sideways. As long as it goes sideways in a form of a chart pattern, range bound failed on bottom and then on top (Evergrande news), bitcoin is neither bearish nor bullish for this local price movement. The market starts trending with Higher High and Higher Low over 67000 or starts trending down from 58100 breakdown and retest. Other than this, it’s a range and range trading strategies apply well.

  1. Inside range trading (buy range lows or sell range highs)
  2. Outside range trading (buy the breakout retest or sell the breakdown retest
  3. Do not trade the range at all and wait for the trend to come up.
    Other than this, the market is still supposed to continue upwards based on the larger context and overall technical strength of the bull run.
    After tag on 59147 aVWAP support and building demand within 58.7k-60.6k zone, it makes it decent buying opportunity the closer to 58-59k it gets from the technical point of view.
    Worth noting down key levels that matter as supports and resistances for bitcoin.

Resistances:

67000-65292
63032-62300

Supports:

59147-58100
52944
50097
45706

The last three levels are unexpected unless unpredicted FUD news occurs.

MTF 4H:

MTF chart is showing off the said wedge chart pattern with a warned breakdown. After finding a local support at mentioned VWAP level 58.7k it seems there’s significant volume block which may be suggesting that this is a volume-based support area.

Price action wise, the breakdown has occurred and the breakdown retest is supposed to follow shortly. That being the case, BTCUSD would pull back into 63000 region where it would face an attempt of breaking through and continuing upwards (hence confirming fakeout and bear trap) or rejecting and continuing lower for the next few days.

It’s also possibly from the liquidity engineering point of view, that BTCUSD would see an overthrow on the bottom to sweep the stops around 56.5k lows and bounce back immediately with a new purchasing power.

For now it would make a lot of technical sense to base the upside pullback on the local 58000s lows but worth having cash aside ready for potential 56.5k bear trap.

LTF: 1H

Hourly chart seems to have faked out the breakdown on the bottom by sweeping the lows and reverting back upwards immediately within the same session. This Is often called SFP – Swing Failure Pattern.

Mean reversion and statistical nature of market oscillations suggest that it would make a lot of sense to expect BTCUSD to pull back into ~63000 region pretty soon – next hours / days.

There’s technical confluence around 63000 based on pre-breaker resistances (explained in the last report) and aVWAP resistances – all align within similar price region strengthening the significance and chances for volatility and increased volume there in case of rejection of follow-through.

Locally the lows are swept and liquidity grabbed which means that there are higher chances for short-term upside reversal where BTCUSD would attempt to break through 63000 resistance.

When BTCUSD succeeds to do so, the next local resistances are 65281 and 68447.

Bitcoin: Net Unrealized Profit/Loss

Knowing that NUPL stands for the difference between Relative Unrealized Profit and Relative Unrealized Loss and that i can also be calculated by subtracting realised cap from market cap, and dividing the result by the market cap, one may notice a few points on this local decline.

Firstly, NUPL has retraced from 0.65 to 0.596 – almost 10% of local highs and printed lower low while the price hasn’t got a lower low. This tells me that the market has decreased it’s leveraged and realized profits quite aggressively making the market less over-extended and healthier.

Secondly, the mentioned “bearish divergence” on top (higher highs on price vs lower highs on NUPL) has come to an effect and will maintain its short-term “bearish” impact. This means that if price forms a lower low, there might be one more heavier drop – potentially to 53000 region but Id not my strategy based on that.

What’s clear is that the market keeps building up higher and those corrections are needed to maintain the balance and symmetry in the trend.

Bitcoin: Number of Active Addresses (168h MA)

As glassnode gives, The number of unique addresses that were active in the network either as a sender or receiver. Only addresses that were active in successful transactions are counted.

As seen in the chart, the active addresses onchain metric doesn’t print the same result that NUPL, which means that the market has got cleaner (less leveraged/extended) while the addresses on average remain relatively stable. The conclusion is that the number of participants remains unchanged on average despite lots of liquidations on recent drops. It may suggest that new traders of wise money have entered the market and positioned themselves for the final leg up. May be a little bit far-fetched but it would make logical sense.

FEAR/GREED INDEX

As seen in the diagrams, fear/greed index has decreased sharply from 71 to 52 points in the matter of one day. It signals that the crowds in the market have lost significant confidence about the market going up. The more confidence they lose, the better for the bulls.

Now that the market has got shakier and wobblier it may suggest that it would take a few days to re-build the lost certainty. Once disbalanced, it takes time to rebuild the confidence within the PTSD environment (a lot of liquidations and traders in denial).

Im personally not expecting the market to reach extreme fear regions anymore (that’d be unexpected blessing) as that would be some decent buying opportunity before new ATH. Yet, if we are lucky and the market gives, this would be a buying opportunity that many have waited for.

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