Daily Report – Bitcoin and Market Update (October 30 2021) – The Birb Nest
HTF 1D:
The daily chart, although hasn’t closed the session for today yet is showing a battle over successful breakout above the bull flag chart pattern. One may argue intraday success or failure so far while this becomes irrelevant. For a successful breakout over the bull flag, bitcoin needs to close a daily candle over 62300 USD and the closer it approaches 63000 USD, the more confirmation it gets the stronger the eventual breakout results will be. Technically, the bull flag breakout should lead BTCUSD to its target at 85700 USD .
Volume based supports show off aVWAP at 56942 USD while local resistance of 61509 USD of aVWAP anchored at ATH has already been broken and reclaimed by yesterday’s daily close. This suggests an early confirmation of an upside breakout to me as it shows bitcoin’s strength at the resistance level.
Expecting breakout into 65-66k USD, tiny bit of rejection in the form of a breakout retest rounded at the bottom and then both followed by a proper thrust into unknown regions with clear sky over 67k.
Round numbers like 70000 USD, 80000 USD should work as local resistances – I wouldn’t long into round numbers for sure but rather take profits on the way up.
Also, Bollinger Bands are showing clean consolidation with declining volatility. The BB-based support at 56000 USD and resistance at 65.5k USD, the moment we see a strong daily close outside 65.5k USD this would validate the volatility breakout and explosive move beyond 70k USD easily.
Currently sitting at 20-day average support with higher chances of pushing for 65.5k USD than 56k USD.
MTF 4H:
MTF picture is showing an attempt of a bull flag breakout. So far the breakout isn’t fireworks and its rather low momentum. It’s not that I don’t like it per se. It just seems lazy and not powerful at the first shot. PoC and volume profile analysis suggests that 62.8k USD is the main local resistance. This means that when BTCUSD flashes a strong 4H or 1D candle close through that level, the upwards breakout should gain strength, power and proper acceleration – hence more confirmation behind my 85700s USD target thesis.
Additional support from 200MA shown at 56k USD, which aligns with the other indicator and technical tools mentioned in the report.
It’s in good spot on the bullish side of things and the sooner it gets the boost from the buyers, the better.
For the nature of patterns though, as long as bitcoin is trading between it’s low of 56-57k USD and high of 67k USD, It’s neutral. It has flashed already bull flag pattern with a local breakout which swings more chances for bulls already but still it’s an EARLY confirmation. Final confirmation naturally comes with an unarguable daily/weekly/monthly close through 67k USD.
Kind reminder for what NUPL stands according to glassnode:
Net Unrealized Profit/Loss is the difference between Relative Unrealized Profit and Relative Unrealized Loss. This metric can also be calculated by subtracting realised cap from market cap, and dividing the result by the market cap.
Very simple overview allows me to recognize that the market is way more undervalued and way less leveraged at the same ATH region vs April-May. This means that NUPL is lagging behind the price, which has already tapped new ATH confirming long term directional breakout. Not a single time bitcoin making new ATH after some break was bearish or fake. New ATH is a very powerful market strength signal. NUPL lagging behind the price shows 0.72-0.74 ratio while trading over 58k USD in April-May, and current 0.63 when BTCUSD is trading even higher than 58k USD steadily and surely.
This adds upside room for growth imo. As mentioned many times before, my aggressive scale out process starts with NUPL breaking 0.75 ratio and final scale-out aggression when it hits 0.8.
Bitcoin: Number of Active Addresses (168h MA)
Reminder for what it is: The number of unique addresses that were active in the network either as a sender or receiver. Only addresses that were active in successful transactions are counted. This onchain metric shows the market is healthy on the network side as it trends the same way that the price action of bitcoin. No divergences spotted that could threaten bitcoin’s upwards movements so far. This is yet another confirmation after NUPL that the market is undervalued more at the same prices vs April-May reversal period. Only 79% of the Active Addresses “power” was needed to break the new ATH already. It’s hence to inrepret that bitcoin’s onchain is stronger than in April-May period and hence adds to the bullish thesis of BTC pulling off 85k USD and beyond in November. For those who missed out on my yesterday’s premium webinar explaining how to prepare for the upcoming largest BTC & altcoin pumps, visit the link below and enjoy. God bless.