Weekly Bitcoin USD Chart Analysis Calendar Week 11 – 2021

Bitcoin USD daily basis

Bitcoin USD Chart Analysis - Consolidation below 60'000 USD

In the reporting week, Bitcoin put a marching stop to the upward movement initiated since March 5. This led to a new all-time high at 61,680 USD on Saturday of the previous week. From Sunday and at the beginning of the reporting week, profit-taking set in, which brought the price back to the weekly low of 53,008 USD by Tuesday. The daily closing price and trading activity on Wednesday already took place again at elevated levels above the 57'000 USD zone. From Thursday, the main action took place in the area 58,000 USD, where the respective daily closing prices were also registered until the end of the week. This was with a tendency of decreasing trading ranges, and declining volume. A potential sign of a larger move ahead.

Intact structure of the uptrend

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After the mid-March 2020 price plunge, a veritable counter-trend was established. This led to the resistance zones from 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 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 10,000 USD 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 10,000 USD area since the end of July 2020 and provided a first confirmation of a trend reversal with the break of the resistance zone around 12,200 USD 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 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 break through the old all-time high at 20,000 USD saw a strong accentuation of the uptrend. Subsequently, the price doubled in only 23 days. A first correction brought the price back below 30,000 USD. Thereafter, a renewed upward movement began, which finally led above the previously reached all-time high at 42,000 USD and marked a new all-time high just below 60,000 USD 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, and since then the price has been consolidating below 60,000 USD.

Outlook

Bitcoin has been in an accentuated uptrend since breaking the 2017 all-time high. This has been accompanied by two healthy consolidations so far, which each found their 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.

The structure of the uptrend is absolutely intact with the respective lows of the previous correction above the 40,000 USD mark. The market developed accordingly around the mentioned trend line since mid-December. In the microtrend, a triangle formation is forming around this zone, which, together with declining volume, points to a larger movement in the near future. In the event of a breakout from this formation, the upper trend line of the recession channel above 67,000 USD acts as resistance. If a correction occurs, the lower trendline of the triangle formation serves as initial support. More significant support is found at the lower area of the trend channel in the 50,000 USD area. 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 average in the area 47'000-45'000 USD. In this case, the area around 40'000 USD serves as renewed support.

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 (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 20,000 USD impressively demonstrated the power of the upward movement that had been established since October. It led to a parabola (yellow), which is currently ongoing and reached its first high at just over 42,000 USD. After a one-month correction, this was continued and found its high above 58,000 USD. After a second correction phase, the price reached its preliminary all-time high in the ongoing price discovery phase in the reporting week below 62'000 USD. Thus, there are no resistances for the time being.

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 39,000 USD. 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 32'000 USD and rises accordingly fast. Further support zones in the weekly interval can be found in the area of 20'000 USD.