Daily Report – Bitcoin and Market Update (September 26 2022)

HTF 1W:

The weekly chart has added yet another bar to the bearish setup for the long-term chart.

As the last weekly session printed a new local low, it still remains within the 17500-25000 USD zone. Hence, within the larger downwards context, BTCUSD is now moving sideways. Typically, when such a case occurs, it may be more of a continuation pattern, than the reversal.

The 200-week average at 23478 USD may act as a resistance in the near term, whenever BTC would approach the level from the underneath.

Meanwhile, the 7-week correlation coefficient is at 0.68 vs the S&P 500 benchmark. This proves, still, strong and positive correlation between bitcoin and large cap stock’s prices. Hence, for seeking the BTC bottom, it makes a point to expect the large cap stocks to flatten out at first.

HTF 12H:

The middaily chart seems to be trading at the lows of the consolidation pattern, forming since the June lows at 17500 USD.

For the past days, BTC has remained on the bearish note, even since breaking down the 20500 USD support.

The CTF Trailer has been bearish-sided, following the disappointing CPI print for August. As long as it does, the prevailing dominance is shown by the bears.

Otherwise, the 200-day mean resistance at 28700 USD remains as the long-term breakout level, validating a new bull market.

Until the break comes, and for as long as the CTF Trailer leans toward the bearish side, BTC may well exceed the June lows – just like many stocks already did.

MTF 4H:

The MTF chart has chopped around the 19000 USD level recently.

BTC is now trading in the very middle of the BPRO Momentum Bands, which display the regular volatility range to be at 18200-19800 USD. It suggests the lack of traders’ conviction, and uncertain expectations about the direction of the market for the next days.

It is, because the market prices reflect and are driven by the anticipation of future prices, much more than the current conditions.

Until a break above 20000 USD, or below 18200 USD is confirmed with a daily close through, then BTC remains neutral and sideways and is likely to continue to chop around the middle ground.

LTF 1H:

The hourly chart is giving a deeper look inside the sideways pattern, as BTC chops around 19000 USD.

The pattern frames are given at 18200 USD, and 19700 USD areas. It suggests that as long as BTC continues to move within those boundaries, then the volatility factor is limited and promoting range trading and mean reversion – buy the lows, sell the highs.

By definition of it, BTC is more likely to meet a bullish or bearish divergence, as it approaches the low or the high area, which will encourage trend fading traders.

Bitcoin: Net Unrealized Profit/Loss (NUPL)

Kind reminder for what the NUPL ratio stands – find the quote below after Cryptoquant:

“Net Unrealized Profit and Loss (NUPL) is the difference between market cap and realized cap divided by market cap. Assuming that the latest coin movement is the result of a purchase, NUPL indicates the total amount of profit/loss in all the coins represented as a ratio. It could be interpreted as the ratio of investors who are in profit. Values over ‘0’ indicate investors are in profit and an increasing trend in value means more investors are beginning to be in profit. This phase indicates the increasing reason to take profit which leads to an increase in sell pressure.”

The NUPL ratio is now at -0.07, which proves that many traders are with unrealized losses, and that the market seems to be more oversold or underappreciated than not.

Historically, negative NUPL values were present during the bottom reversals, at least in the recent BTC history. While it can not guarantee success in future, the history often rhymes.

Hope it helps. God bless.