I recommend reading these reports on the Buy Me A Coffee platform for optimal formatting.
You will find the content below in this order:
1. Definitions
2. The Good
3. The Bad
4. CME Gaps
5. Key Levels
6. Final Thoughts
DEFINITIONS
Liquidity zones are high volume levels that offer support and resistance
Hidden bearish divergence: creating a lower high in price, with a higher high on the oscillators. This signals a possible trend continuation down.
Bearish divergence: higher high in price, lower high on the oscillators. This signals a possible trend reversal down.
Hidden bullish divergence: creating a higher low in price, with a lower low on the oscillators. This signals a possible trend continuation up.
Bullish divergence: creating a lower low in price, with a higher low on the oscillators. This signals a possible trend reversal up.
SR flip: turning old resistance into support, and vice-versa.
Fractal: recurring geometric pattern.
THE GOOD
Daily Timeframe
Bullish Market Structure
Bitcoin continues to print higher highs and higher lows. This is known as a bullish market structure. As long as Bitcoin continues to print higher highs and higher lows, we are technically bullish.
Key Liquidity Zone (LQZ)
Zone 1: Sitting between 33.9k and 35.2k, Bitcoin is still trading above this Key Daily Liquidity Zone. As long Bitcoin remains above this zone, we can expect it to act as support.
Exponential Moving Average (EMA): 8
Bitcoin will close above this EMA.
Implication: Ideally, it serves as a level of support.
Simple Moving Average (SMA): 200
Bitcoin will close above the 200-day SMA.
Implication: Ideally, it serves as a level of support. By technical standards, Bitcoin is back in a bull market if this SMA can be held as support.
Divergences
Hidden Bullish Divergence
Bitcoin has a higher low in price, with a lower low on the RSI. This is a hidden bullish divergence, which signals a possible trend continuation up.
Invalidation: Lower low in price and the RSI.
Bullish Divergence
Bitcoin has a lower low in price, with a higher low on the MACD. This is a bullish divergence, which signals a possible trend reversal up.
Invalidation: Lower low in price and the MACD.
4H Timeframe
EMA Ribbon
Bitcoin has risen above the ribbon in this timeframe.
Implication: For the first time since late November, the momentum is with the bulls. Ideally, the ribbon turns into a level of support.
Simple Moving Averages (SMA): 20 and 50
Bitcoin has risen above these SMAs.
Implication: Ideally, they will serve as levels of support.
Divergences
Exaggerated Bullish Divergence
Bitcoin has a similar low in price, with a higher low in the MACD. This is an exaggerated bullish divergence, which signals a possible trend reversal up.
Invalidation: Lower low in price and in the MACD.
Patterns
*Please note not all technical targets will be hit, so be aware of all key levels and Fibonacci Levels, and also look out for divergences as they have the power to reverse a trend
Descending Channel
1H Timeframe
EMA Ribbon
Bitcoin has risen above the ribbon on this timeframe.
Implication: Momentum is currently with the bulls.
THE BAD
Daily Timeframe
Logarithmic Curve
Bitcoin has lost the median as support and may now be losing the 0.382 Fibonacci Level as support. Continuing to lose level after level is not ideal one bit.
Key Liquidity Zone (LQZ)
UPDATE: Zone 2: The second LQZ sits at 47.3k - 48.6k, which Bitcoin has lost as support. It may serve as resistance moving forward.
Zone 3: The final daily liquidity zone sits at 60.7k-61.9k, which Bitcoin has lost as support. We may see it serve as resistance moving forward.
Bullish Exhaustion
We have an increase in price with a decline in volume, possibly signalling a loss of bullish momentum in the market.
Directional Movement Index (DMI)
*This is another momentum indicator.
Generally speaking, when the blue line (bullish) crosses below the orange line (bearish), it signals a potential shift in momentum to the bears.
Network Value to Transaction (NVT)
*This indicator describes the relationship between market cap and transfer volumes.
Bitcoin has lost the NVT Signal Line as support. Typically when this happens, Bitcoin sees a more sustained correction.
EMA Ribbon
Bitcoin has lost the EMA ribbon as support in this timeframe.
Implication: It may end up serving as strong resistance.
Exponential Moving Average (EMA): 21, 50 and 200
Bitcoin has lost these SMAs as support, and we have seen a Death Cross between the 21/50-day EMAs. We have seen a Death Cross between the 8/200-day EMAs. We have seen a Death cross between the 21/200-day EMAs.
Implications: These may serve as resistance moving forward. Death Crosses signal a potential bearish continuation. Keep in mind, however, the most important EMA Death Cross is between the 50/200-day EMAs.
Simple Moving Average (SMA): 20, 50 and 100
Bitcoin has lost these SMAs as support, and we have seen a Death Cross between the 20/100-day SMAs. We may see a Death Cross between the 50/100-day SMAs.
UPDATE! Implications: They may serve as a level of resistance moving forward.
Divergences
Hidden Bearish Divergence
Bitcoin has lower highs in price, with higher highs in the RSI/MACD. This is a hidden bearish divergence, which signals a possible trend continuation down.
Invalidation: Higher high in price and the oscillators.
4H Timeframe
Bearish Market Structure
Bitcoin continues to print lower highs and lower lows. This is known as a bearish market structure. Until Bitcoin can create a meaningful new higher high, the medium-term outlook for Bitcoin is bearish.
UPDATE: Bitcoin has created a new higher high for the first time since November 10th.
Key Liquidity Zone (LQZ)
Zone 1: Bitcoin has lost this LQZ as support, which sits at 56.9k - 57.4k.
Zone 2: There is a new LQZ at 48.5k - 48.8k that is serving as resistance right now.
Implications: A lot of the liquidity in this timeframe rests above the current price of Bitcoin. We may see this serve as resistance moving forward.
Simple Moving Average (SMA): 50 and 200
Bitcoin continues to trade below the 200 SMA, and has now lost the 50 SMA.
Implications: They may act as resistance moving forward.
Divergences
Hidden Bearish Divergence
Bitcoin has lower highs in price, with higher highs in the RSI. This is a hidden bearish divergence, which signals a possible trend continuation down.
Invalidation: Higher highs in price and in the RSI.
1H Timeframe
Divergences
Exaggerated Bearish Divergence
Bitcoin has similar highs in price, with lower highs on the RSI/MACD. This is an exaggerated bearish divergence, which signals a possible trend reversal down.
Invalidation: Higher high in price and the RSI.
CME GAPS
The gap below us at 32480 is still open. Although not all gaps fill, they do tend to, which is why I'm still including this gap as something to be aware of.
GAP: 53675
Key Levels
Daily Timeframe
29790
33380
35910
38205
39245
40735
42205
44865
46255
46700
47140
47800
47635
46255
44865
42205
40735
39245
38205
35910
33400
29800
48290
49490
50590
51295
51755
52665
53950
54340
54720
55315
56245
56900
57775
58050
58415
58865
Fibonacci Levels
4H Timeframe
39970
40755
41645
42845
44215
45310
46745
48145
48845
49755
50380
51000
51885
52190
52829
53235
53865
54885
55473
Fibonacci levels
1-hour Timeframe
42000
46130
47920
48315
49190
49700
50545
51200
51680
52605
53860
56040
57375
Fibonacci levels
FINAL THOUGHTS
RECAP FROM THIS MORNING
Bitcoin has seen a move to the upside after bouncing yesterday from right inside of the Golden Pocket. And for the very first time since November 10th, Bitcoin has created a new higher high. This is a great sign for a change in market structure.
Alongside these bullish developments, Bitcoin has also risen above the 4H EMA Ribbon for the first time since late November while breaking to the upside from the Descending Channel.
If Bitcoin continues up, our levels that sit above are still the same. Nothing has changed in that regard.
I do, however, have a few concerns. Now although the volume we're seeing is decent, it's nothing to get too excited about yet. The reason is, we are still creating 1H/4H bearish divergences. As we know, bearish divergences can only be invalidated by creating higher highs in both price and in the oscillators. Seeing these types of divergences after such sustained downside PA is natural. It doesn't mean we can't continue up, it just means that we may still have a bumpy road ahead of before continuing up.
Make it a common practice to get bullish at the lows, and bearish at the highs. Ie, and not financial advice, but I would not look to long at highs or short at lows. Quite the opposite actually.
All in all, Bitcoin remains in the same position as it's been in on a macro level. But, it's great to see that our support held and that the market structure is starting to change. Maintaining the 45.5k is critical, because if we lose that level, we go back to creating lower lows. This would ultimately invalidate the case for a new higher high.
_
TONIGHT
The Good
Trading above the Daily LQZ 1
Possible reclaim of the Daily LQZ 2
Possible reclaim of the NVT
Risen above the 200-day SMA
Risen above the 8-day SMA
1D Hidden Bullish Divergence
1D Bullish Divergence
4H Exaggerated Bullish Divergence
Holding the 1W EMA Ribbon
CME Gap at 53,665
Bullish Market Structure (1D timeframe)
Reclaimed the 1H/4H EMA ribbon
Possible higher low and higher high market structure forming
_
The Bad
1D Hidden Bearish Divergence
1W Bearish Divergence
1M Bearish Divergence
4H Hidden Bearish Divergence
1H Exaggerated Bearish Divergence
Bullish Exhaustion
Lost the 1D EMA Ribbons
Lost the 21/50/200-day EMAs and the 20/50/100-day SMAs
Lost the 20/50/200 4H SMAs
Lost Daily LQZ 2/3 (for now)
Lost the 4H LQZ 1
Finding resistance from the NEW 4H LQZ 2
Volume Analysis
Bearish NVT (for now)
Bearish DMI
Rejected from the Bitcoin Logarithmic Curve Median Line
20/50-day SMA Death Cross
21/50-day EMA Death Cross
20/100-day SMA Death Cross
8/200-day EMA Death Cross
Possible 21/200-day EMA Death Cross
Possible 50/100- day SMA Death Cross
Bearish Market Structure (4H timeframe)
Lost the Bull Market Support Band
Lost the 20/50W SMA
Lost the 8/13/21W EMAs
_
This Macro Volume Analysis still stands.
_
After rising to just under the Golden Pocket from this morning's report, Bitcoin has formed a sideways range. We have a clearly defined range high at roughly 49.3k, with the range low at about 48.3k. As we know, Bitcoin tends to range much longer than most expect, leading to the majority of retail traders getting chopped out because they long the highs and short the lows. (NFA but you want to do complete opposite of that as long as the technicals support it.)
Right now with this recent rise up, we have seen some decent volume follow. On top of that there are a few new bullish developments. It's possible we have a bullish NVT. This is simply where we close above the orange Signal Line and hold it as support.
We will also close above the 8-day EMA and 200-day SMA. Traditionally, when an asset is trading above the 200-day SMA, it's considered to be in a bull market. Ideally, we see Bitcoin test it and hold it as support.
The last new major bullish development is that we've created a micro higher high to go along with our higher lows. It's great to see a potential shift in market structure. However, what Bitcoin needs to see is a move above 52k in order to create a new meaningful higher high.
Now for the bad news... Bitcoin is creating 4H/1D hidden bearish divergences which isn't ideal, but is to be expected after seeing such a big move to the downside. This could provide some further turbulence and choppiness in the days/weeks to come. Alongside these macro divergences, we do also have a 1H bearish divergence at the range high. This could potentially cause Bitcoin to trade sideways, or see a move down to the range lows.
All in all, Bitcoin remains in the same position as it's been in on a macro level. But, it's great to see that our support held and that the market structure is starting to change. Maintaining the 45.5k is critical, because if we lose that level, we go back to creating lower lows. This would ultimately invalidate the case for a new higher high.
Friendly reminder to remain level-headed! Even if we do see a meaningful move to the upside sooner rather than later, there's still the possibility that it may be a dead cat bounce. Weekly/Monthly divergences are very significant for the macro outlook of an asset if they aren't invalidated.
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Cheers!