Daily Report – Bitcoin and Market Update (October 24 2022)
The weekly chart has not displayed any significant instance of strength in the way BTC moves.
For the past few months, BTC has been moving nothing but sideways and between 17500 USD and 25000 USD marks. Recently, though, traders have been suppressed in the lower end of the range, which eventually brings the risks of a breakdown.
The 200-week mean (23792 USD) and the 50-week mean (32916 USD) can work as resistance areas on the way up.
The 7-week correlation coefficient has decreased substantially and broken out of the 5-month range of 0.5-0.95, a vital alert showing a weakened relationship between stocks and BTC.
However, the dominant primary trend is downwards.
The middaily chart continues to struggle over a break to the upside, above the CTF Trailer Stop at 19720 USD.
This suggests that the dominant medium-term outlook is focused on the sideways trajectory, which lacks a trend. This is not helpful to many new traders.
Overall, if the upwards breakout is not facilitated in a confirmed manner, the bears have the upper vote in the market, potentially setting targets downward at 14000-15000 USD areas.
Lots of noise is portrayed in the 4H picture.
The BPRO Divergence System has recently detected bullish divergence alerts.
However, there has been no follow-through to the upside (or to the downside) just yet.
Instead, the market oscillates between more or less fixed frames or boundaries, 18000 USD and 20000 USD.
As long as BTC remains within those frames, a more explosive moment is not expected to come, and BTC will likely continue to consolidate.
The ‘extreme fear’ saga continues, as traders are still giving up their hopes on the way BTC moves upwards.
Historically, whenever BTC remained for a longer time within the extremely scared environment, it rather gave good calls to the contrarian investors, who would be the mean-reversion traders – investing counter the trend, driven by irrational behavior of investors.
Now, at 22 points on the scale, the loss aversion populates and traders often decide to withdraw their positions or tighten the stops, which causes order clustering at specific critical levels.
If activated, a larger and more explosive/volatile movement should be generated out of it.
The vast majority of traders would do best if held tight and not overtraded the sideways period, to later not find themselves on the wrong side of the trend, when it finally develops.
Hope it helps. God bless!
P.S. I’ve got something nice for you all – see the tweet below 🙂