Bitcoin Daily Chart Analysis
On the Daily Timeframe, Bitcoin continues it's consolidation following the epic plunge back down to the bottom of it's range on Monday. The current and the last two Daily Candles can be considered Inside Bars, indicative of consolidation and tightening volatility. They herald a potential reversal, and a breakout - although the breakout could come in either direction.
Bitcoin's price found support at the 200 Simple Moving Average, a strong area of support.
Volume Profile Analysis also shows us that Monday's lows wicked down into a Low-Volume Node, an area of liquidity where buyers stepped in, and so far Bitcoin is maintaining itself back within the High-Volume Node of it's current range ($60,600 - $71,400).
Volume Delta shows that buyers have been in control today and over the past two trading days, and the Time Transformation Momentum Oscillator is recovering from it's overbought condition after printing a Reversal Buy Signal.
Bitcoin Mining Analysis
Analyzing the profitability and incentives of Miners has been a strong edge in my trading strategy.
We can see that Bitcoin's price is at a historical "Back the Truck Up" zone, where' Bitcoin's price has tested the Average Production Cost to mine a Bitcoin.
In Bitcoin's history, we have never seen price sustain itself below this level, however we have seen several occasions where price has wicked below, with the most notable being the March Meltdown in March of 2020.
The Hash Ribbons Indicator lets us know that Miners are still in capitulation, and I believe that Ordinals and Runes are the main cause of this, as the demand for blockspace remains high, allowing miners to earn significant revenues from fees rather than having to focus on block rewards, allowing them to continue to sell.
The NVT Indicator is still in a downtrend.
Simply put, we are at a critical area of support where historically, capital allocation into Bitcoin has been the correct play.
There are significant macro headwinds that may alter Bitcoin's reaction moving forward, potentially pushing us into unchartered territory.
Bitcoin Liquidation Heatmap Analysis
Unfortunately, Bitcoin has now cleared all significant short liquidation to the upside. This is, funny as it may sound, not a positive sign for short-term price action. This indicates that sentiment in the short-term traders has shifted bullish, but it's occurring in a down-trend. Generally, when the sentiment of retail flips, it's a sign of a reversal. Were I to see more short liquidations stacked up above the current range high, I would be more bullish short-term, but sellers are still in control of this market, and this begins to look like a trap.
Although I feel confident that the current lows at $59k will hold for the time being, today's price action seems bound to re-visit the $61-60k range for a re-test.
Bitcoin Large Limit Orders
Bitcoin just filled four clusters of Large Limit Asks on this morning's upthrust, between $60,000 - $62,300. When Large Limit Orders are filled, price often makes a large move in the opposite direction, as it indicates that big positions have been filled by contrary traders. Bitcoin will need to make a decisive push back above $63.3k today to prove the buyers have enough momentum to continue this rally.
Bitcoin Footprint Chart
In addition to filling Large Limit Asks, we can see Aggressive Buying came into the market on all three attempts to break above the $62,300 level of resistance. In all three occurrences, the bulls were unable to sustain the rally, as sellers stepped in with force and swatted price down. Below us, we have Aggressive Bid Imbalances at $61,479 - $61,365 - $61,018 that I expect to be tested today. If that occurs, more than likely we will sweep Long Liquidations heavily clustered $60,565 and $60,204 - potentially even re-testing the Aggressive Bid Imbalance at $59,644 before more significant upwards progress can be made.
