Daily Report – Bitcoin and Market Update (November 22 2022)
The weekly chart has printed an additional confirmation for the support breach at 17500 USD.
Following the support breakdown, the long-term outlook seems to be pointing another step downwards.
The technical breakout objective is at 10000 USD.
Will it get there?
God only knows, and we are yet to find out.
The breakout can be considered credible and reliable – confirmed by two consecutive closes below the critical level.
Interestingly, the 7-week correlation coefficient has turned strongly negative.
Now, at the -0.64 ratio, there is an inverse relationship in the direction of the movements of stocks and BTC.
There is now a heavier deviation of the prices vs. the long-term fair levels – 200-week mean 24072 USD, and 50-week average 30022 USD.
The latter must be broken to kick off a new bull market officially.
Meanwhile, the daily chart is displaying a bearish pennant breakout.
At 22300 USD, the 200-day average works as the bear market resistance line.
At any time, if the bulls manage to reclaim these prices, the bear market trajectory will be in danger.
A breakout over $22300, hence, will produce a warning signal to the bears to start exiting their short positions.
The technical breakout objective for the pennant is at 12000 USD.
If the pennant breakout fails to close outside of the triangle, the chances are this is a failed pattern.
Failed patterns tend to perform better in the opposite directions.
The MTF chart displays an ongoing bar, which may be a failed breakout.
A local swing failure will be confirmed if the day closes over the 15600 USD support.
Failed patterns perform better in the opposite directions than expected at first.
Hence, a daily close of over 15600 USD could inspire a sharp, short-term incline toward $17500.
However, the long-term charts with significant downward breakouts are not looking promising for the bulls.
For this reason, I recommend much caution when in heavy long-oriented positions.
MARKET SCANNER OUTLOOK
Bitcoin: Net Unrealized Profit/Loss (NUPL)
The NUPL ratio is at -0.25 approx. This proves the traders are netting losses at a significant rate. Net results of the trader results are underwater. While it can not guarantee future performance, the current NUPL pattern reminds the reversal patterns from the past cycles. But, note it’s a small sample of data. So, not necessarily BTC must resemble much the old reversal patterns, in order to revert higher this time.
Hope for the best. Be ready for the worst – This approach has saved me from millions of dollars in losses this year. I can’t recommend that enough.
Hope it helps. God bless.
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