Bitcoin USD daily basis
Bitcoin USD chart analysis - Overcoming the 40,000 resistance zone
At the beginning of the reporting week, it looked as if the newly climbed price area above the 40,000 mark could not be defended. The strong upward movement of the previous week was followed by a first correction on Sunday, which brought the price back to 39,149 USD by Monday. On Tuesday, Bitcoin exited the market lower again at 38,191 USD. On Wednesday, initial buying set in, bringing the price back to 39,722 USD and thus just below the 40,000 USD resistance zone. A strong sign was set on Thursday. At the beginning of the trading session, downs guided the price below the lows of the previous trading sessions, triggering some "stop-loss" orders. Within the day, however, there was a strong countermovement, which led back to 40,888 USD - and thus above the resistance zone. The bulls took advantage of these good technical conditions on the following two trading days. On Friday, a daily closing price of 42,869 USD was achieved, which was already higher than the highs of the previous week. During the weekend, the positive momentum continued on Saturday and brought another higher closing price with 44,637 USD. On Sunday, profit-taking at the end of the week led to slightly lower price levels than the previous day.
Breakout from upper range of three-month price corridor
Review Daily Interval
After the price plunge in mid-March 2020, a veritable countermovement established itself. This led to the resistance zones above 10,000 USD. After an initial rejection and a consolidation phase lasting almost two months, a breakout through the fundamental resistance zone followed on July 27, which had been established since August 2019 and had already caused Bitcoin to fail a few times to date.
The resistance zone around USD 10,000 was interesting in several respects. On the one hand, the 0.618 Fibonacci point of the entire downward movement, which was initiated at the end of June 2019 just below 14,000 USD, is located here. On the other hand, the zone around USD 10,000 simultaneously acted as a confirmation of the still bearish trend from lower highs since December 2017 (see macro view on a weekly basis). Bitcoin was able to establish itself above the newly created support in the USD 10,000 area since the end of July 2020 and provided a first confirmation of a trend reversal with the break of the resistance zone around USD 12,200 towards the end of October 2020. In the following weeks, the positive trend accentuated and led Bitcoin through the 14,000 resistance in early November 2020 and close to the then all-time highs around 20,000 USD for the first time in early December, which remained untouched for 158 weeks since the bull market in 2017.
Since the breakout through the important 14,000 resistance at the beginning of November, it has been blow by blow. The breakout through the old all-time high at 20,000 USD saw a strong accentuation of the uptrend, which saw the Bitcoin price mark its new all-time high just below 65,000 USD on April 14. The rapid upward movement was so far characterized by 3 corrections, each of which found its low point around the 50-day average (light blue line). However, the fourth correction led for the first time clearly below it and thus it also came to a violation of the trend line, which has served as support since the beginning of the year, formed by the respective daily lows. In recent weeks, this resulted in an accelerated downward trend, which led below important support zones. As a result, the price consolidated in the corridor USD 30,000 - 40,000.
Outlook
For the first time, we are above the price corridor 30,000 – 40,000 USD, which has persisted for 11 weeks. A "rounding bottom scenario" in the area of the 0.618 Fibonacci point, which is calculated between the start of the rapid uptrend and the new all-time high, has manifested itself in a strong upward movement.
The impressive countermovement that followed the last failed attempt to break the 30,000 USD support zone came determined and shaped the current positive market environment. Within 9 trading days, the upward movement led to the 42,000 USD resistance zone. The subsequent correction bottomed out at 37,000 USD and guided the price back to the 200-day average at 43,792 USD at the end of the week.
The price action in the reporting week including the "retest" of the 37,000 USD zone confirms the renewed positive environment. Currently, the 200-day moving average serves as resistance. As long as incipient price declines do not lead back to the zones below 42,000 USD, a next test of the 50,000 resistance zone is likely.
The beginnings of a healthy consolidation
Review Weekly Interval
Bitcoin was able to set a higher high above 10,000 USD for the first time in the weekly interval in 2020, which broke the prevailing bearish trend since December 2017. This broke the series of lower highs that lasted for 135 weeks (1).
Since this first overcoming of the bearish trend, the signs for a valid trend reversal became stronger. With the push through important resistance zones and a continuous development above the 21-week average (2), the probabilities for a renewed reaching of the all-time high created in 2017/18 increased visibly. This was accomplished in mid-December 2020. This was followed by a strongly accentuated price discovery above this historical mark, which produced a new all-time high of 65,000 USD in mid-April. A consolidation initiated since then ended in a veritable price slide, which brought Bitcoin back to the 30,000 USD mark in just two weeks.
Outlook
With the price movements in the past year, a good foundation was created to sustainably climb new spheres beyond the all-time highs reached in 2017. The break of the 20,000 USD mark impressively demonstrated the power of the upward movement that had been established since October. The rapid price increase was now abruptly interrupted with a price drop, which even brought Bitcoin below the 21-week average (2) that has defined reliable bull or bear market phases in the past.
It remains to be seen how sustainable the current correction phase will be. Bitcoin had equally experienced setbacks of >50% in bull phases in the past. The price consolidated in the interesting 0.618 Fibonacci zone since the start of the bull market. Last week's upward movement reduced or even negated the risk of a forming shoulder-head-shoulder formation. Sustained price action above the 40,000 support zone and a recapture of the 21-week moving average over the near term is required for a sustained positive picture. A "make it or break it" situation is expected from 52,000 USD. Here, the market decides whether a renewed attack on the all-time high should take place or whether the countermovement towards the all-time high ends in a "bull trap" as in January 2018.
Disclaimer
All information in this publication is provided for general information purposes only. The information provided in this publication does not constitute investment advice and is not intended as such. This publication does not constitute and is not intended as an offer, recommendation or solicitation to invest in any financial instrument, including cryptocurrencies and the like. The contents contained in the publication represent the personal opinions of the respective authors and are not suitable or intended as a basis for decision-making.
Risk notice
Investing in cryptocurrencies, is fundamentally associated with risk. The total loss of the invested capital cannot be excluded. Cryptocurrencies are very volatile and can therefore be exposed to extreme price fluctuations in a short period of time.
