Bitcoin USD daily basis
Bitcoin USD Chart Analysis - Another High After Healthy Correction
The upward movement set in the previous week consistently continued in the reporting week. On Monday, the Bitcoin price closed at USD 52,394, a level not seen since February 23. The trading action of the previous week led to an effective bottoming after the previous correction. By surpassing the respective highs of the more than 12 days lasting bottom formation, a strong technical signal for a continuation of the ongoing bullish macro trend was set at the beginning of the reporting week. Subsequently, an ascending price trend with steadily higher daily lows was completed on each trading day during the reporting week. This strong base already led on Thursday to the previously reached all-time high at USD 58,200. This could be cracked after testing twice on Saturday. At the end of the week, trading moved around the USD 60,000 mark.
Intact structure of the uptrend
Review daily interval
After the price fall of mid-March 2020, a veritable countermovement was established. This led to the resistance zones from USD 10,000. 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 USD 14,000, 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 USD 14,000 resistance in early November 2020 and close to the then all-time highs around USD 20,000 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 USD 14,000 resistance at the beginning of November, it has been blow by blow. The break through the old all-time high at USD 20,000 saw a strong accentuation of the uptrend. Subsequently, the price doubled in only 23 days. A first correction brought the price back below USD 30,000. Thereafter, a renewed upward movement began, which finally led above the previously reached all-time high at USD 42,000 and marked a new all-time high just below USD 60,000 on February 21. After a correction, a new all-time high just below the 62,000 USD mark was recorded in the reporting week, after only 20 days.
Outlook
Bitcoin has been in an accentuated uptrend since the break of the 2017 all-time high. This has been accompanied by two healthy consolidations so far, each of which found its bottom above the 50-day moving average (light blue line). Since then, the price has been moving around a trend line, which acts as support and resistance. A resulting regression trend over two standard deviations has since served as an accurate indicator of the trend channel.
As mentioned in the last report, the odds were in favour of a continuation of the recent bullish microtrend and the cracking of the USD 60,000 level. The structure of the uptrend was absolutely intact with the respective lows of the previous correction above the USD 40,000 level. The market developed accordingly, and with the recorded gains in the reporting week, the Bitcoin price is approaching the upper trend line of the regression channel at USD 65,000. Accordingly, this zone can be considered as resistance. The trend line at USD 56,300 serves as the first support. Further support is found at the lower area of the trend channel in the area of USD 47,700. Just below that is the 50-day moving average, which has so far served as a good indicator of the bullish phase that started in November.
The intact bullish momentum would be damaged with the break of the channel and the 50 day moving average in the area USD 47'000-45'000. In this case, the area around USD 35'000 serves as the first support.
Macro: New all-time highs
Bitcoin was able to set a higher high above USD 10,000 in the weekly interval for the first time 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 the break of the bearish trend, signs of a valid trend reversal have been building up. 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. This was accomplished in mid-December 2020. Since then, a strongly accentuated price discovery above this mark has been taking place.
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. It resulted in a parabola, which reached its first high at just over USD 42,000. After a one-month correction, this was continued and found its high above USD 58,000. After a second correction phase, the price reached its preliminary all-time high in the reporting week below USD 62,000 in the ongoing price discovery phase.
In case of an incipient correction, a respect of the previously created supports (green) over the next weeks/months will be necessary to make the initiated phase of exploration in new price spheres sustainable. What remains to be observed here is the first zone of the one-month march stop around USD 39,000. In case of a continued correction, the 21-week average (2) becomes relevant, which could reliably indicate bull and bear phases so far. This is currently in the area USD 32'000 and rises accordingly fast. Further support zones in the weekly interval can be found in the area of USD 20'000.
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.
