Daily Report – Bitcoin and Market Update (September 25 2021)

By Cryptobirb

HTF 12H:

The middaily chart shows BTCUSD trading right beneath its average volume-based fair value and above it’s 50-week moving average (dotted line) providing the ultimate support area for bitcoin in case of further downhill slides.

One needs to remember NOT to pay too much attention, recognition or significance of local pumps and dumps as we’re trading inside the same long term range 28.8-65k where bulls are not real about their moves until we break above the ATH, most likely during Oct-Nov period. On top of that, we’re trading inside a local range 30k-53k.

I’m personally leaving some stinky bids with reasonably sized position around 50-week average 36-38k but all in all, it’s not something I’m specifically waiting for. If I’m lucky and market gives, good for me but because Id already deployed more than 500k loading dips 40-42k in past days, I’m already well positioned for the final leg up.

Reminder, that practically the only invalidation for the final legup scenario and bull market ending prematurely is an unpredicted black swan event which cant be read from technical analysis charts, e.g. military conflicts, global markets collapse, natural catastrophes, martian virus pandemic (leave that for 2028 lol).

53-58k targets are still there and I personally believe we’ll see them in mid-late October right before breaching through the new all time highs. I can’t tell what will happen in next 5 minutes or 5 days, but I for one know surely, that whenever there’s orchestrated FUD narrative on the market, and they bring China bans for the 100th time on the headlines, it’s time to load the dips within extreme fear after 20-30% declines.

It’s not easy to move ~1bn usd market. To get the price down to your institutionally demanded levels, you have to make crowds believe it’s over and make them 100% certain it’s true 🙂

MTF 4H:

MTF chart is trading sideways in quite a deviated range which after two consecutive fakeouts (one on the top, and at the bottom). Those fakeouts effectively broadened the range to spread between 39.6k and 53k, which mark the extreme low and extreme high of the range.

Because of the fakeouts, deviations, I’d consider 50.5-53k to be supply zone and 39.6k-42.3k to be of demand zone. The higher into the supply, the better selling opportunity. The closer to the bottom of the demand zone, the better buying opportunity it becomes.

As always, ranges are the less reliable chart patterns as anything that happens inside the rectangle is considered neutral, not bullish or bearish. The neutrality makes it rather poor deal to make any trading decisions around its center values 46-47k. 

Volume profile analysis confirms that 46-47k is where the most liquidations before occurred so this zone would have the tendency to act as a psychological magnet for the market, acting as a resistance when BTCUSD trades below it, or support whenever BTCUSD breaks above. On the way up to 46-47k center inside-range supply, there are other resistances defined by volume and price action. Local pre-breaker candle confirms that 44k resistance may stop bulls temporarily on micro timeframes. Another level to pay attention to is the blue curve being aVWAP anchored at the peak of the fakeout, with fair price of bitcoin ever since at 45.3k. 

As long as it trades inside the said ranges, do not expect the market to act “rationally” and “predictably” from the technical analysis point of view. No patterns, trendlines, candle formations have much predictive power within the range boundaries as the market is not trending in any direction, just swinging back and forth more or less chaotically.

As for any other range, (especially for this micro-PTSD range from China FUD inside a larger range – double range) the trading plan for this one narrows to the 3 points down below:

1.    Inside Range Trading : buy the range lows, sell the range highs

2.    Outside Range Trading: buy the upside range breakout (or retest), sell the downside range breakdown (or retest)

3.    Do not trade the range at all

NUPL

The onchain insights reveal no actual bullish/bearish divergence going on. NUPL ratio is currently at 0.509 which is marked as an overall belief where the higher the ratio moves, the better it is to lock in profits on regular basis.

Aggressive scaling out of the market on my end will come whenever we first breach through NUPL > 0.75 ratio which historically had always brought market reversals after few following weeks.

Bitcoin: Number of New Addresses (7-day average)

As glassnode explains, this metric stands for the number of unique addresses that appeared for the first time in a transaction of the native coin in the network.

Mildly interesting is the fact of somewhat mild bullish divergence which shows the momentum of active addresses is not really declining but rather just slowed down momentum of growth since the sub 30k lows.

Price made locally declining lows sequence while the onchain metric did not. I read it as a tiny signal of market strength. However, I would not really over interpret it. It’s rather an observation that any buy signal showing ultimate market strength. 

That’s something that has potential to evolve into way more significant market signal in near future.

FEAR/GREED INDEX

Currently at 28 points the index shows the sentiment to be of fear. Historically, buying into extreme fear and China FUD narratives have been way more profitable than not. Crowds are always wrong at the extremes due to perception biases, e.g. saliency. The more extreme the emotional state of the herds, the stronger herd instincts, panic and irrationality that makes people sell cheap and buy expensive.

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