Daily Report – Bitcoin and Market Update (September 28 2022)

HTF 12H:

The middaily chart seems to be presenting an instance of a fake breakout, following the USD breakout.

Yet another failure to break outside the 18300-19700 USD range makes BTC subject to increased volatility, because the more the fake outs populate, the more the market “boils” underneath the surface, as the transaction turnover accelerates.

For the greater context, BTC continues to reside within the sideways pattern, with the 17500 USD, 25000 USD boundaries. As long as it does, the Bitcoin price is more likely to continue to chop around with no decisive direction.

Typically, the longer the patterns take to form, the more explosive the breakout may become, as the orders tend to clustering in tighter areas, closer to the swing low and swing high.

Besides, the HTF Trailer 1W shows the main breakout level to confirm the new bull run it’s at 30400 USD.

MTF 4H:

The medium-term chart continues to oscillate within the regular volatility frames, highlighted by the BPRO.

Despite there has been a breakout attempt outside the High BPRO Band, showing short-term willingness of the market to continue higher, it was wiped out by the following immediate dump.

For now, BTC seems to be more likely to continue moving within the bounds 18300 USD and 20400 USD if accounted for the extremes. More likely than not, the projected range is 18600-20100 USD.

Eventually, failed pattern breakouts tend to be perform better in the opposite direction than initially expected. For this reason, it may well happen that BTC slides below the 18000 USD support, reaching into the June lows. If that happens, this may confirm a large pattern (June through September) fakeout, which can commit to the final capitulation spike – maybe even into the 10-14k USD territory.

LTF 1H:

The hourly chart chops around the 19000 USD level, placed in the middle of the pattern.

A closer look inside the top breakout failure gives an impression, that it had been preceded by a short-term distribution pattern – a double top, followed by a sharp decline back inside the range pattern.

Failed patterns tend to perform better in the opposite direction than the one suggested by initial breakout orientation. Here, it seems the better odds are that BTC may persist stronger in the downwards direction, perhaps behind the 18200 USD support level.

Traders should manage their risks accordingly.

FEAR/GREED INDEX:

At 20 points on the scale, the fear among the traders seem to be picking up and escalating.

It is now classified as extreme fear, and the lower the index hand points at, the better the contrarian investment setup.

Typically, contrarians benefit from the underinformed herds, which suffer from representativeness bias, cognitive dissonance, loss aversion bias, as well as misrepresentation bias, Simply put – the inexperienced traders will continue to sell into the bottom, or refuse to close their underwater positions – only to give up at the greatest selling point – climax. More often than not, when this happens, this is proved to be the market bottom in the hindsight.

Depending on the investors’ risk preferences, the contrarian position may be the favourable ones for many who are not afraid to enter early, counter trade the main trend, for the sake of having better potential returns.

Adjusting to your preferred risk profile, and investing style is recommended.

Hope it helps. God bless.