Bitcoin USD daily basis
Bitcoin USD Chart Analysis - Parabolic Movement Leads to 42'000 USD
The year started brilliantly, and Bitcoin continued its parabolic price rise. During the week under review, this movement led to a new all-time high of around 42'000 USD. This high was reached on Friday's trading session and also marked the high for the week. A first test of the market's strength followed at the beginning of the week. On Monday, a short-term selloff took the Bitcoin price from the previously reached USD 32,000 to below USD 28,000 during the course of the day. However, incipient buying brought the price back above USD 32,000 by the end of the day. The market showed no real signs of weakness, and so on Tuesday, it was tested again at 30'000 USD, but the lower prices compared to the previous day were again used for purchases, and thus the day's closing price was already above 34'000 USD. The direction of travel was set, and as a result, two trading days with almost identical daily gains of around 8% followed on Wednesday and Thursday, which let Bitcoin close at just below the 40,000 USD mark on Thursday. On Friday, as mentioned at the beginning, the Bitcoin price reached its high for the week at just under USD 42,000, however, the new all-time high was reached with a wide trading range of just over USD 5,400. From Saturday, the market consolidated and went into a selloff on Sunday evening, which resulted in temporary prices at below 35'000 USD. The day closed at around 38'000 USD. The first consecutive red candle in 29 days had it all!
Exuberant price discovery in new territory
Review Daily Interval
After the mid-March 2020 price plunge, a veritable countermovement established itself. This led to the resistance zones from 10,000 USD. After a renewed rejection at the beginning of June, a consolidation lasting almost two months was observed. This was characterized by a series of higher daily lows and lower daily highs. The series of lower highs was broken on July 22. This was followed on July 27 by a breakout through the resistance zone around USD 10,500, which has been established since August 2019, and where Bitcoin has failed a few times so far.
The resistance zone around 10,000 USD 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. The aforementioned resistance zone had been effective since January 2018 and served as a zenith for the price several times since then. In the following weeks, the positive trend accentuated and led Bitcoin through the 14,000 resistance at the beginning of 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.
The sustained breakout through USD 20,000 in mid-December initially led to the USD 24,000 zone, where the price consolidated for a good week. This was followed by impressive price jumps, which only allowed the price to briefly consolidate again in the USD 32,000 area. A renewed upward thrust in the reporting week led the Bitcoin price to a new all-time high of around 42,000 USD on Friday.
Since the breakout through the important 14,000 resistance level at the beginning of November, the price has gone from strength to strength. This was followed by the breakout through 20,000 USD in mid-December, which, after a short consolidation at 24,000 USD, lead to another price fireworks; and catapulted the Bitcoin price to over 32,000 USD. Only five days later, Bitcoin reached its new all-time high of 42,000 USD in the reporting week.
Since November, there has been a strong accentuation of the upward trend, which most recently sent the Bitcoin price into a parabolic rise (1). Price discovery beyond the historical highs and thus in uncharted territory is the current market mode. Many things are possible at this stage. Resistances are non-existent for now. In particular, the daily MACD indicators point to the extremely overbought level.
For a sustainable establishment, the recently overcome resistances should be respected as support in the coming weeks (green). The last short-term consolidation occurred in the zone around USD 32'00 and should serve as initial support. The area above 24'000 USD becomes more interesting, as the 50-day moving average and the 0.618 Fibonacci point since the beginning of the parabola and the all-time high are calculated in this area (2). This is followed by another support zone near USD 20,000.
Macro: New all-time highs
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.
Since the break of the bearish trend, the signs of a valid trend reversal became stronger. With the break 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. This was accomplished in mid-December 2020.
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 USD 20,000 impressively demonstrated the power of the upward movement that had been established since October and resulted in a parabola (1). Corrections become more likely after such accentuated price increases. For example, the weekly RSI indicator at 94 is already well above the level reached in the bull market of 2017 (3). In case of an incipient correction, a sustained respect of the newly created supports (green) over the next weeks/months will be required to decisively advance into new price spheres in the upcoming period. The first support in the weekly interval is located at around USD 20,000. Significant is the support zone 17'000-14'000 USD, which is characterized by historical price movements as well as the 21 week average.
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.
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.