NOTICE: There will only be 1 report tomorrow around 1PM EST. Normal operations will resume on Sunday evening!
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
EMA Ribbon
Bitcoin is trying to find support from the EMA ribbon on this timeframe.
Implication: Ideally, this serves as support.
What is an EMA ribbon? A 'ribbon' of EMAs that together indicate bearish and bullish momentum in the market. When an asset is trading is above the ribbon, it's considered bullish. Vice-versa.
Simple Moving Averages (SMA): 20 and 50
Bitcoin is trying to hold these two SMAs as support.
Implication(s): Momentum may be shifting on a macro level if these can be held as support.
Exponential Moving Averages (EMA): 8, 21 and 50
Bitcoin is trying to hold these EMAs as support.
Implication(s): Momentum may be shifting on a macro level if these levels can be held as support.
Network Value to Transaction (NVT)
*This indicator describes the relationship between market cap and transfer volumes.
Bitcoin is trying to hold the NVT Signal Line as support.
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. Given that the orange line still trends above the blue line, Bitcoin's momentum remains negative.
We may be seeing a bearish cross between these two signal lines. If that does happen, it implies that momentum is back to being more bearish than bullish on a macro level.
4H Timeframe
Key Liquidity Zone(s)
Zone 2: This LQZ sits at 36.7k-37k, which Bitcoin continues to trade above.
Implication(s): Ideally, this serves as a level of support moving forward.
Simple Moving Averages (SMA): 200
Bitcoin is trying to find support from the 200 SMA.
Implication(s): Ideally, this serves as a level of support.
Divergence(s)
Potential 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 in the RSI.
THE BAD
Daily Timeframe
Bearish Market Structure
Bitcoin continues to print lower highs and lower lows, thus, maintaining its bearish market structure. Until we start to see new higher highs and higher lows form, we can expect this macro trend to continue.
Logarithmic Curve
Currently Bitcoin is attempting to break the 0.236 Fibonacci Level. If successful, the next level to breakthrough is the 0.382 Fibonacci Level.
Once Bitcoin fell below the median line, it became bearish. We can treat this curve as we do with ranges – the upper half = bullish, the bottom half = bearish.
Key Liquidity Zone (LQZ)
Zone 1: The first LQZ sits at 46.5k - 47.8k, which Bitcoin has unfortunately fallen below. We may see it serve as resistance moving forward.
Zone 2: Bitcoin has lost this LQZ which sits at 41.9k-43.2k.
Implication(s): They may serve as levels of resistance if Bitcoin manages to continue its ascent.
Exponential Moving Average (EMA): 200
Bitcoin continues to trade below the 200 EMA.
Implications: This may serve as resistance moving forward.
Simple Moving Average (SMA): 100 and 200
Bitcoin continues to trade below these SMAs. We have seen a Death Cross between the 50/200-day SMAs. This is a traditional marker for whether or not an asset is in a bear market or not. When the 50 SMA trends above the 200 SMA, the asset is bullish. When the 50 SMA trends below the 200 SMA, the asset is bearish.
We have seen a another Death Cross between the 100/200-day SMAs.
Implications: They may serve as a level of resistance moving forward.
Divergences
Hidden Bearish Divergence
Bitcoin has a lower high in price, with a higher high in the RSI. This is a hidden bearish divergence, which signals a possible trend continuation down.
Invalidation: Higher high in price with a higher high in the RS.
4H Timeframe
Key Liquidity Zone(s)
Zone 1: Bitcoin has fallen below the LQZ sitting at 41.9k-42.2k.
Implication(s): This may serve as a level of resistance moving forward.
EMA Ribbon
Bitcoin has failed to hold the EMA ribbon as support in this timeframe.
Implication: This may serve as a level of resistance moving forward.
What is an EMA ribbon? A 'ribbon' of EMAs that together indicate bearish and bullish momentum in the market. When an asset is trading is above the ribbon, it's considered bullish. Vice-versa.
Simple Moving Averages (SMA): 20 and 50
Bitcoin has lost the 20 and 50 SMAs as support.
Implication(s): They may serve as levels of resistance moving forward.
1H Timeframe
EMA Ribbon
Bitcoin has failed to hold the EMA ribbon as support in this timeframe.
Implication: This may serve as a level of resistance moving forward.
What is an EMA ribbon? A 'ribbon' of EMAs that together indicate bearish and bullish momentum in the market. When an asset is trading is above the ribbon, it's considered bullish. Vice-versa.
CME GAPS
The gap below us at 32,480 has nearly been completely filled!
GAP: 53,675 – As mentioned when the gap first formed, this is a "breakaway gap". These are gaps that form when there's a dramatic shift in market structure. Typically these gaps take much longer to fill than the normal gaps. This is comparable to the gap at 32,480.
GAP: 40,640 FILLED
Key Levels
Daily Timeframe
29790
33380
35070
35910
36905
38205
38855
39245
40735
41565
42205
43900
44865
46255
46700
47140
47720
48290
49490
50840
50590
51295
51755
52665
53950
54340
54720
55315
56245
56900
57775
58050
58415
58865
Fibonacci Levels
4H Timeframe
28805
29280
30150
31000
32800
33490
34785
35970
36000
37330
38313
39600
39970
40755
41645
42845
44215
45310
46745
48145
48845
49755
50380
51000
51885
52190
Fibonacci levels
1-hour Timeframe
33510
36235
36760
37420
37975
38250
38720
38920
39265
40880
41915
42170
42235
42656
43000
43780
45490
Fibonacci levels
FINAL THOUGHTS
RECAP FROM THIS MORNING
After reaching the high of our range, Bitcoin has now fallen down to the low of the range. Currently, we are seeing attempts at creating new bullish divergences.
If the bullish divergences do solidify, and we see a move to the upside, we may see either an SFP or a move up to this Golden Pocket where there is likely to be resistance.
And if the bulls are unsuccessful with holding 42k as support, these Golden Pockets remain the same.
All in all, Bitcoin still does remain in a bearish position on a macro level for a multitude of reasons. And with us now trading at the low of the range, it has become more likely that we continue down. I am looking for a continued move to the downside to fill the CME Gap.
_
TONIGHT
The Good
Trading above the 1D EMA Ribbons
Trading above the 20/50-day SMA
Trading above the 8/21/50-day EMAs
4H/1W Hidden Bullish Divergence
Trading above the 200 4H SMA
Trading above the 4H LQZ 1
Bullish NVT
Bullish DMI
CME Gap at 53,665
_
The Bad
Lost the 1W EMA Ribbon
Lost the Bull Market Support Band
Lost the 20/50-week SMAs
1D Hidden Bearish Divergence
1W Bearish Divergence
1M Bearish Divergence
Bearish Market Structure (1D timeframe)
Trading below the 100/200-day SMAs
Trading below the 200-day EMA
Trading below the 20/50 4H SMAs
Trading below the Daily LQZ 1/2
Trading below the 1H/4H EMA Ribbons
Resistance from the Bitcoin Logarithmic Curve Median Line
20/50-day SMA Death Cross
20/100-day SMA Death Cross
50/100-day SMA Death Cross
20/200-day SMA Death Cross
50/200-day EMA Death Cross
50/200-day SMA Death Cross
100/200-day SMA Death Cross
_
TONIGHT
As we've been going over the last little while, I was expecting the CME Gap at 40,640 to fill. Moments ago, we saw just that happen. And currently, we are finding support from our first Golden Pocket that we've all kept our eyes on.
Do I think it will hold? Let's have a closer look.
1D MACD Histogram
Alongside our hidden bearish divergence, the MACD histogram is about to turn negative. What this implies is that momentum is shifting from more bullish to bearish. Typically, we see a continued move to the downside or sideways consolidation.
1H/4H Timeframes
There is a lack of strong bullish divergences on these two timeframes. We have a 4H hidden bullish divergence, yes, but considering far apart the troughs are, it isn't all that strong. And when we look down to the 1H timeframe, there are no bullish divergences – yet.
With all of this in mind, I do think we will see lower levels. Now that we've touched down at 40k, these are the next Golden Pockets that will likely serve as levels of support. Those are points at which I will be looking to either close my short positions, or at least TP. And they are also points at which I will be looking to open long positions.
All in all, Bitcoin still does remain in a bearish position on a macro level for a multitude of reasons.
Thank you for your continued support, and I hope you have a great rest of your week!
Cheers!
NOTICE: There will only be 1 report tomorrow around 1PM EST. Normal operations will resume on Sunday evening!