Daily Report – Bitcoin and Market Update (September 8 2021)

By Cryptobirb

HTF 12H:

Yesterday showed the importance of locking in the profits and confirmed the risk-off scenario I’d been talking about in my reports in last 2-3 weeks. As mentioned before, flash crashes 15-20% should always be expected as you never know when they will come. You know they WILL come but you never know when truly. Because of that it’s always important to lock in the profits after every bigger move up, especially if it aligns with my predicted rejection levels from July where I was repeating like a broken record that 53-58k Is where whales would be unloading. The 20% drop that’s just happened is a rapid shakeout and does NOT change the long term bitcoin’s direction.

If you look at it, it has literally 100% accurately tapped the very projection of the peak of the recent leg up of weekly chart pattern – coil or symmetrical triangle. It’s following the predicted plans for this reason. The violent move of course came from largest cascade liquidation of 4B usd. It shows the extent to which the market was over extended and over leveraged.

As I was saying through the past weeks, the extreme fear environment supports the thesis that inexperienced traders were longing right into the resistance after having sold into extreme fear 29-30k bottoms in prior.

Crowds are always right in the middle of trend but always wrong at the extremes.

Besides, it’s already tapped into my given 42-43k support levels backed by volume. Currently, the local short-term volume based resistance shows up at 47.5k and in case this one is eventually broken (very likely imo) for a short moment, it would be to tap the upper resistance from the pre-breaker candle of 50402. When this level shows up, I’ll be releasing next wave of my profits realized.

LTF-MTF Bollinger Bands are oversold btw and as long as 12h candles keep closing over the lower band (no matter the shadows if below the bands or not), bulls are “safe”.

It’s also not crossed out of my list yet for bulls to revisit even 52000s because of intensified volatility.

MTF 4H:

MTF chart shows a hypothetical concept of my PTSD projection which would reflect classical behavior of bitcoin’s market right after unexpected crash or news selloff events occur.

First phase typically is about very intense and broad volatility with very high risk. It’s NOT suggested for scalpers or short-term traders to traded intraday swings because the market is highly unstable and lacking the trend. For that, you should expect irrational, not “technical” movements where no patterns, movements are really predictable and come true as you could expect them to do based on regular TA readings. After the market and people have realized what has just happened – some people woke up to liquidated accounts which is always about denial – the PTSD phase II starts.

Phase II of PTSD range is imo about market recovering and reverting back to its means. Clearly, 47.6 and 49.1k can be used for reference as resistances backed by volume of the selloff. In case these ones are breached with decent close of 4h or higher candle over that resistance, the next is the said pre-breaker setup for 50402-51000 retest which marks the fakeout zone above as distribution place.

Phase III is when the market slowly recovers its “technical” features and TA applies better back again. That’s when you could trade BTCUSD more safely.

Until then, PTSD stands for range Post Traumatic Stress Disorder period as I refer to it. As any other range, it only trades outside the boundaries, not inside where its lacking the direction by definition.

As any other range trading setup, you may apply one of the three strategies 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

Most of you would probably do best if no range trading at all is applied.

Notice and refer back to my reports, where I kept repeating over and over again how the market was only seeing the first impulse with the upside pullback and that the next short-term FEAR period for the crowds sentiment was due to come fast. We’re there now.

NUPL

The market has surely seen rapid profit realization in a form of sell the news type of an event for El Salvador officially approving bitcoin as legal tender. As it always happens, when the market sees mainstream people getting in the market, the whales have enough buying liquidity to sell and dump their bags onn those who’re joining LATE – I was very clear about calling people who were joining over 50k very late.

Now NUPL trades at 0.554 which is a 8-10% decline versus recent peak at 0.60s.

As always, whenever the market trades in belief or green zone per NUPL, it’s worth locking in the profits after every major move up.

FEAR/GREED INDEX

Crowds have started to fear back again. Wait through the PTSD zone accordingly as the crowds get more and more fearful. The moment you see fear/greed index in the fear or extreme fear zone below 30 or 25, that’s the best time to buy based on sentiment. Follow at your own will.

I was talking about this sentiment switch after first extreme greed impulse back in July. Scroll back if disbelief.

Remember, crowds are always right in the middle of trend but always wrong at the extremes.

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