Daily Report – Bitcoin and Market Update (October 07 2020)
Daily chart is clearly trapped in a pattern fractal – pattern inside a pattern. In this case it is a bigger descending channel with a symmetrical triangle inside the channel. Breakout above the triangle resistance, which is confluent with 50-day moving average, should unlock the strong upside expansion towards the highs of the entire correction 12-12.5k. Until it happens, BTC/USD as well as other crypto pairs with altcoins stay inside corrective bearish or neutral movement as we approach US elections in the overall uncertainty. Note that the transition period between Q3 and Q4 has always been the most neutral and hostile for crypto traders. With the sentiment 9-year average sentiment of 50%, it is the most neutral time of a year. It means the market on average rarely ever trends during the period. This makes it almost impossible to trade successfully any bigger timeframes than intraday scalps, which still do not even provide decent volatility range per ATR (Average True Range) on daily and weekly intervals (see the charts below).
MTF picture is showing bitcoin moving in a classic contracting sideways movement which resembles symmetrical triangle type of a formation. As any chart pattern, it is a consolidation, which can be interpreted as the market taking a breath before the futher moves. It is very typical to uncertainty and neutral sentiment of investors and expresses overall withdrawal. The capital seems to be waiting on the sidelines and chooses to decrease the exposure to high risk assets which cryptocurrency market is. The waiting causes the market to slowly bleed or stay completely flat in LTF-MTF perspective. From the technical point of view, what counts the most for any chart pattern are the range lows (9800s) and the range highs (11100s). Local volume profile spikes at 10300s and 10500s confirm that these levels combined in a support cluster create a decent short term demand zone. As any range, this structure is the most profitable and predictable to trade it outside rather than inside. And that’s another reason why so many traders are waiting on sidelines. No position is also a position and it’s definitely not suggested to trade against the market.
I recently met my biggest idol Michal Sadowski, CEO of extremely undervalued stock company in the industry, Brand24. On the show, we discussed sentiment analysis in investing, business, marketing, crypto and secret stories that made them global!