Daily Report – Bitcoin and Market Update (September 4 2021)
The middaily chart shows local series of doji type candles showing uncertainty in the market combined with low volatility. Knowing that we have already seen ADX tendency breakout (top indicator), one can draw conclusion that we should expect more explosive move coming as the trend strength (ADX) has started to slightly improve.
Candlestick analysis combined with volatility reading from Bollinger Bands, give me some reservation because of local fakeouts on top (new high was made but candle closed below the resistance it was attempting to break) and the fakeout suggests too little strength to break through average volatility. For bitcoin bulls it would be best to finally see a strong daily close candle over local highs – now 51k. Strong bullish candle closed through the upper Bollinger Band would confirm a volatility breakout signal in the upwards direction suggesting that the short term volatility has stronger upwards orientation when compared with standard ranges. When this case comes confirmed, I would expect 53-55k region to be tested fast. Otherwise, if bitcoin sees more indecision time during the rest of the weekend, each candle without breakout and after massive 70%+ rally up off 29.2k lows brings the higher risk of faking out the move and flash drop into low to mid 40s.
Just like I mentioned on my yesterday’s webinar, each warning from the market (e.g. a fakeout candle) must be taken now with the biggest urgency and caution. You never know when the reversal comes as you don’t have a crystal ball, but you know that every candle fakeout gets us closer to the volatile reversal.
Birbicator on the bottom is showing local signs of exhaustion while it’s not at the best reliability as the TK histogram (gray/orange bars behind the Stochastic ribbon) does stand out from the momentum readings. It tells me that the market is in the current form of a range with little (and decreasing) advantage from bulls.
It’s hence still a profit taking zone for me. While hoping for the best, protect your capital to be ready for the worst just in case it comes.
MTF chart is fighting hard to reclaim the previous supply zone. So far it’s somewhat successful but it’s lacking its due power which makes me remain in the caution state. It’s definitely a bit risky to load longs at current levels without clear market confirmation so Id personally wait for reliable signals described in the 12h chart analysis.
MA50 is trading at 48.7k and in case of a rapid micro drop this would serve as a local support. In case of a further fakeout realization, the prior floor at the demand zone in 47.1k now well aligns with 46.2k support provided by 200MA which works as a dynamic support.
In severe case of unexpected news release with FUD for crypto or global risk-off moment on traditional markets because of FED or military tensions in Afghanistan, BTCUSD may keep declining into previously mentioned areas of aVWAP support between 41.8-42.9k which definitely seems like a good place to keep some cash aside for leaving bids down there JUST IN CASE.
Daily close below 48k confirms a fakeout for a 12h triangle pattern shown in the previous chart and adding slightly to the bearish forces.
The net unrealized profit/loss indicator seems to not be showing any specific divergence or signal for reversal.
Now at 0.584 it aligns well with the price action directions which rather tells me there’s no clear sign of weakness but as long as it’s trading inside the Belief, green zone, it’s about casual taking profits to protect the returns.
Unrealized profit is no profit.
For better context, let me quote my previous update about the sentiment:
“As the diagrams suggest, the crowds sentiment has slightly declined to 71 points on the scale. It’s still noted as greed territory whereas the crowds are slowly losing the belief/engagement/excitement about the market moving up.
It hence shows it’s still good idea to take some profits off the table just for the sake of protecting your capital.
Based on the sentiment, the good buying opportunity comes as soon as we get to see fear or extreme fear below 30 points on the scale. This would mean there’s enough disbelief to set the market up for potential short squeeze into 53-58k territory. Keep your eyes and head up while protecting your profits.”
As a matter of fact, one can tell that we’ve been stuck pretty much in the same place over the last couple of days. For this reason, all I wrote on Wednesday applies today very well.
The market suggests that it’s wise to lock in profits as long as we stay in the greed or extreme greed environment. It’s worth applying in my opinion, while keeping your head, eyes up and hoping for the best aka 53-58k test.