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HTF 12H:

The middaily chart continues its local chop with intraday volatility contraction, locally.

The Bitcoin prices seem to oscillate within a narrow range-bound movement at 18.5-20.8k USD.

Having built somewhat of a support zone with the BWAP block at 19.4-20k USD, backed by volume, for as long as the prices remain above the block, the short-term bulls are more likely to continue to push upwards. However, there is a limitation to that.

Such a limitation comes from the CTF Trailer Stop at $21795. As long as BTC trades below that threshold, the bears remain in control and have the upper vote in the market.

MTF 4H:

The MTF chart maintains the sideways trajectory for Bitcoin prices.

The continued chop has flipped back to the bullish note, after maintaining the CTF Trailer Stop at 19481 USD. As long as this level is defended, the short-term bulls have the upper hand. Yet, the non trending environment causes a lot of noise and triggers fake signals. One should practice caution while utilizing trend strategies as long as the sideways pattern develops.

Price action wise, the failures to break above the 21000 USD resistance commit to the mean-reverting movements and promote range trading strategies (buy low, sell high). Any fake signal following a breakout failure tends to perform better in the opposite direction than the one anticipated just on the breakout direction itself. As such, a failed top breakout empowers the sell-off, whereas a failed bottom break accelerates the rally to the upside.

Furthermore, relevant support levels rest at $18985 (19000 USD) and $17104 as given by the BPRO. At the same time, the BPRO Level Lines define resistances at following anchors:

31192
28481
21440

These levels could be anticipated to serve as level-to-level references. In other words, when one level is breached, the next one in the direction of the movement

LTF 1H:

The short-term bulls have failed to break above the top, resulting in a reversal line at 20800 USD.

Combined with the BPRO divergence 91% strong, this lays out a potential scenario for a short-term range lows retest for the sideways pattern.

If that comes true, then one of the price objectives may be the 18500 USD region. However, one should stay mindful about the empirical proof that the fake top breakouts tend to decline faster and stronger to the downside. For this reason, it is worth being ready for the BTC price action to slip below the range lows, at least for the short-term.

The condition is, however, that the BTC bulls fail to break above the 21000 USD on the daily basis.

FEAR/GREED INDEX:

Having spent a few weeks in the capitulation territory, BTC prices continue to generate extreme fear in the market.

There has been a slight sentiment improvement, however, as the index hand has reached 18 points on the scale.

Historically speaking, the more the underinformed herds express their pessimism and fear toward an investment, the more likely the investment is to be profitable over the following weeks and months.

While this is not a timing indicator, it may still provide contrarian based, and valuable information about whether buying or selling may yield better results.

The downside potential has not expired just yet, based on the cyclical troughs at 80-90% drawdowns (now -75% off the highs). Still, contrarians may find current prices relatively attractive.

More details to be shared in the premium corners of The Birb Nest. Don’t miss them!

Hope it helps. God bless.

HTF 12H:

The middaily chart seems to be adding more and more orange-colored bars, which according to the BPRO may be considered more bullish than not, and building an overall promising setup. There is a catch to it, however.

The catch is that the middaily CTF Trailer remains still on the “bearish” side, which lets bulls maintain the control over the rmarket. The CTF Trailer breakout threshold rests at $23141 and plays the role of critical resistance. A proper break above the level with a daily or weekly close through it validates a trend reversal to the upside.

Until that happens, the bears have the upper vote in the market. This implies that the supports are more likely to be broken, while resistances are to provide barriers.

The AVWAP support showing a cyclical support level defined by the price and volume, is at ~17800 USD. This area is considered attractive from the long-term point of view. Whenever there is a retest around this level, it may be expected to be bought back by the smart money.

MTF 4H:

The MTF chart shows a consolidation pattern, which may be considered one of attempts to build a bottom base out of it.

The CTF Trailer for the short-term remains on the bullish side, which suggests that the bulls have the upper vote in the near-term. The upwards tendency is valid until a breakdown below the Stop threshold at 20342 USD. In case this level is reclaimed by the bears with a daily/weekly close below, the bears re-gain the control.

Price action wise, the faster the upwards pattern breakout occurs, the better, as the uncertainty and fear build along with the pattern.

Apart from the support at $17104, the BPRO Level Lines define resistances are projected at following anchors:

32760
28957

These levels could be anticipated to serve as level-to-level references. In other words, when one level is breached, the next one in the direction of the movement

LTF 1H:

The short-term outlook seems to be pointing to a little bit more skeptical take, as the trend line gets broken.

The upsloping trend lines often work as dynamic supports, as traders tend to adjust their stop losses and buy orders for their loss aversion bias, and regret bias after getting hurt in the past. This typically leads to orders clustering under the trend line, and the longer it takes to develop, the more orders cluster. Hence, the longer trend lines tend to break with more volatility, as the local trend context gets exhausted, or overbought. This is a reason why skepticism should be employed while bidding the breakdown now.

But, the sideways movements tend to provide less credibility for a classical charting techniques. It means that every signal from an indicator, or a pattern like a trend line should be taken with cautious, if it remains within the previous range of highs and lows. More often than not, new high breakouts or new low breakdowns tend to be much more credible.

For those reasons, it makes sense to anticipate a short-term downwards oriented price action to develop based on the trend line break. Yet, the breakout target may not be as larger as expected – it often continues within the range-bound pattern (here: 17.7-21.7k USD)

FEAR/GREED INDEX:

The capitulation-based theme seems to be maintained, sentiment wise. At 14 points on the scale, the traders continue to fear in an extreme way. This often leads to more volatility, if local supports break to the downside. One should never fall for a representativeness bias. Most, if not all, traders tend to look back at certain patterns (here – capitulation bottoms) and extrapolate it directly into the future, based on a very small sample. The past is never a guarantee of future performance. However, contrarian investors may benefit from making entries into oversold sentiment and panic selling of underinformed crowds. Historically, based on the prospect theory, herds tend to be wrong about anticipating the extremes. Hence, it often makes sense to counter trade them in the extremes.

Bitcoin: Net Unrealized Profit/Loss (NUPL)

As the price pattern continues to develop, the NUPL had already reached historically low levels, marked under the category of “capitulation”. While nobody knows how long the capitulation may take to last, historically it has been profitable to buy into such capitulation for longer-term positions. For the context, the most recent crash took bitcoin’s NUPL ration to the lower regions than during the COVID crash of March 2020. However, it’s fairly distant from the lows of 2018 bear market depression.

Both metrics accounted, this may somehow imply that there is potentially more pain ahead, whereas buying into the already capitulation-based periods may turn into historically profitable positions.

For more insights, consult my yesterday’s webinar – check the link below.

God bless!

HTF 12H:

The middaily chart has recorded a local slow-down to an upwards bar sequence. While it’s not a confirmation for some abnormal strength or momentum for bitcoin, it is somewhat promising.

The CTF Trailer remains downwards-oriented, with a flat critical level at $23141. Until that level is broken through and reclaimed with a daily or weekly close above it, the bears remain in control. This suggests that the overall theme is more bearish than bullish, and the resistances are more likely to maintain strength, and the support – weakness.

The 200-week average is also seen in the chart in the form of the black dotted line, sloping upwards. It provides the long-term anchor, support at 22.4k USD.

Historical records suggest that the 200-week average has usually served as a long-term support area with stronger buying pressure beneath that level.

While history does not repeat, it often rhymes.

MTF 4H:

The MTF chart shows a promising turn for the short-term bulls – a light in the tunnel?

That is, because the CTF Trailer has turned around in favor of the bulls, after the main resistance at 21000 USD was broken with close through it. This has started a new potential tide to the upside, which adds a little bit of more bullish tendency to the shape of the patterns and upwards potential.

As long as the CTF Trailer Stop – the critical threshold at $18748 is defended, BTCUSD has the potential to complete an inverse head and shoulders pattern with a descending neckline.

This additionally adds confluence and significance to the 21000 USD resistance level. The more traders recognize it, the more orders will cluster around it, and the greater the magnitude of the breakout, when it comes.

Those are early attempts of developing a longer sequence and upwards persistence out of a ranging pattern.

LTF 1H:

The short-term price action shows a local rounded bottom pattern, forming around the main support area – potentially promising.

The confluence of resistances seem to be pointing out towards the 23-23.3k USD area to play the role of a supply cluster, where the sellers may aggregate. The first approach may encounter a selling barrier because of that.

The 12h HTF Trailer overlays the chart with the Level Lines resistances.

While the support is given at 20558, the Level Lines define resistances are projected at following anchors:

29277
23342

These levels could be anticipated to serve as level-to-level references. In other words, when one level is breached, the next one in the direction of the movement

FEAR/GREED INDEX:

The sentiment continues to stay at its historical depths and lows typical of the bear markets.

Visually, the capitulation pattern observed these recent days reminds a lot the past capitulations seen through this cycle since 2018 bottom.

The moment that the market confirms bottoming out, the new – 5th cycle will officially start, leading to potentially higher objectives (if the fundamental pattern relying on digital scarcity from the halving remains relevant).

Now, at 11 points on the sentiment index scale, bitcoin still rests at historically low records, Those can be interpreted in favor of the contrarian investors (mean-reverters), who would buy into the panic selling, and sell into the FOMO buying.

The history learns that underinformed crowds are always wrong at the extremes. And history often rhymes.

Hope it helps.

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HTF 3M / 1M:

HTF 3M: The quarterly bar chart closed at the 20-period average support of 19500 USD. Accounting for the fact that it represents one of the worst recorded performance on a quarterly basis ever, I would argue that the major part of the damage is done already. As such, the mean reversion process is complete. This may be used by many long-term investors as an anchor to confirm a fair long-term purchase price.

HTF 1M: On the monthly basis there was an overall 44% price decline recorded between the peak and the trough of June. It also belongs under the category of the worst-performing months ever, for bitcoin prices. The 20-month average price is adjusted at 41500 USD level. This may act as a strong resistance in the future. The fact that bitcoin prices trade at -50% to -55% discounts against the 20-month average, this may be somewhat indicative of how oversold the market conditions are. Historical drawdown off the average to the cyclical troughs were -65% (2014), -52% (2018), -45% (2020), and -57% (2022). Within the small sample size of the data, arguably, current levels may be considered interesting for the contrarian investors.

HTF 1W:

The weekly chart has added yet another bar print below the 200-week average, which is a historical phenomenon, rarely ever seen in bitcoin’s history. With the 7-week correlation coefficient to the S&P 500 index, at 89% it confirms a strong attachment to the large cap stock prices. It is recommended to monitor the stock market prices, in order to base anticipations.

The BPRO suggests that the main breakout threshold is the Stop at $33679, in order to confirm a new cyclical bull run confirmation. However, the great distance from current prices may cause too much lag to base long-term entries on. Still, this may serve as a long-term anchor used for confirmation. Until the level is broken, the BPRO is expected to remain on the “bearish tune”.

HTF 1D:

The daily chart seems to be in near proximity to the 20-day average price.

This may be used as an anchor for the dynamic resistance, and an important breakout threshold. As soon as BTCUSD breaks above the 20-day mean, it may be considered a bullish breakout. An upwards breakout may accelerate the price to the upside, provided that a daily session closes through the average.

The slope of the downwards trending average may suggest that the trend is not sustainable in the longer run due to its great steepness. It may also suggest that a short-term upwards reversal may be due upon.

The condition remains that BTCUSD needs to close close above the 20-day average.

HTF 12H:

The middaily chart continues to trade within a range fractal, locally.

The local price action is trading sideways within a narrow price range of 18600-20000 USD. At the same time, this pattern is a part of a larger chart pattern formed between the 17500 USD low, and the 22000 USD resistance.

The CTF Trailer has adjusted downwards for its breakout threshold, toward the $21795 USD level. As long as the bulls can not reclaim this level successfully with a daily or weekly close above, the bears remain in charge and have the upper vote.

MTF 4H:

The MTF chart seems to be at the edge of an upwards breakout, based on the CTF Trailer breakout system of the BPRO. However, it’s not confirmed just yet.

The CTF Trailer Stop at 19801 USD needs to be reclaimed by the bulls with at least a bar close over it on the 4h time frame, or a higher basis.

Furthermore, relevant support levels rest at $18985 (19000 USD) and $17104 as given by the BPRO. At the same time, the BPRO Level Lines define resistances at following anchors:

31192
28481
21440

These levels could be anticipated to serve as level-to-level references. In other words, when one level is breached, the next one in the direction of the movement

LTF 1H:

The hourly chart has resisted to follow through the upside, over the AVWAP resistance at 19880 USD.

For a valid breakout, there needs to be either a fixed percentage (2-3%) confirmation, or a certain amount of time (e.g. 5 hourly bars, or a day) maintained over the resistance.

The near proximity of the down sloping trend line resistance at 20000-20200 USD region suggests one should be careful of validating the breakout just for the AVWAP. The round number and the trend line also should be accounted and taken into consideration. For that, I would not consider the breakout to be valid, unless BTCUSD records a daily close over 20200 USD level. Otherwise, the chop may continue with multiple whipsaws and losses.

A break out of the local consolidation range at 18500-19500 USD may imply a measured move of 1000 USD added to the breakout level, in order to anticipate a price objective. Hence, BTCUSD may potentially reach the 20500 USD level, if the local breakout is maintained.

FEAR/GREED INDEX:

The sentiment continues with the 14 points on the index scale. As the hopelessness develops, the more the aversion bias (prospect theory) among the traders. Eventually, a stronger upwards move may add to the cognitive dissonance, as the empirical proof (price increase) would conflict the hardened belief of vast majority of investors, that bitcoin prices are headed south. Such a form of disbelief may be a strong contarian confirmation to the upwards thesis, as the majority is always wrong about anticipating the extremes.

Bitcoin: Net Unrealized Profit/Loss (NUPL)

The NUPL ratio records another print at -0.15. While under the capitulation category, the purchases during a selling climax are usually more profitable than selling. Yet, the chances are that there might be still more pain to come for traders to fulfill the pattern of 80-90% drawdown at reversals. Risk management and portfolio diversification are essential to avoid the risk of ruin in such a market.

More details in my premium video report. Get access below.

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But Coo-san went away and Goo-san’s singing began.
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HTF 12H:

The middaily chart continues to chop around a mid-range level of 19000 USD.

Following today’s 9.1% CPI YoY June readings, the risk-on markets have reacted sharply to the downside.

The CTF Trailer has adjusted the breakout threshold downwards to the 21118 USD level. For now, this is the main breakout level that needs to be reclaimed by the bulls, in order to recover the control over the rmarket.

Until that happens, BTC is under the bearish pressure and the bears hold the upper hand.

MTF 4H:

The MTF chart displays an invalidated trend line support at 19500 USD, following the CPI news breakdown.

Broken patterns tend to perform stronger in the opposite direction than anticipated just on the breakout itself. That means, that the broken trend line is rather anticipated to indicate more selling pressures in the near future.
Furthermore, relevant support levels rest at $18985 (19000 USD) and $17104 as given by the BPRO. At the same time, the BPRO Level Lines define resistances at following anchors:

28600
21440

These levels could be anticipated to serve as level-to-level references. In other words, when one level is breached, the next one in the direction of the movement

LTF 1H:

The short-term price action gives a closer look into the failed trend line pattern.

The failed breakout typically gets a more violent breakdown, which was additionally triggered by the exogenous price shock from the CPI prints.

Price action wise, the previous support areas indicate technical anchors at $18595, and $17592. Fairly close proximity of those levels may suggest forming a support cluster within the region defined by those boundaries.

A clean break below the upper support may indicate further cascade of sell-offs and following a retest of the range lows for the consolidation pattern, at 70-75% drawdown off the peak.

Short-term traders would rely on the volatility derived from the macroeconomic readings today, and tomorrow for the jobless claims. Both event trading days may increase volatility, and risk, resulting in losses.

FEAR/GREED INDEX:

At 15 points on the scale, the extreme pessimism saga continues.

It will soon have been a full month since BTC entered the depths of the capitulation stage, which does not seem to be confirmed complete just yet.

Typically, there has been 80-90% drawdown off the peaks, to put in the cyclical trough in the price action.

If history is of any lesson, then more pain may be expected, along with the sentiment deterioration.

As behavioral finance learns, the underinformed herds are always wrong at the extremes. This may come out as a brutal claim. However, the practice proves it is correct.

Contrarians may use this approach to scale in with the purchases, when there is “blood in the streets”. Buying into extreme fear has historically yielded better returns than selling into it.

More discussions in the premium corners of The Birb Nest. Get access below.