Bitcoin USD daily basis
Bitcoin USD Chart Analysis - Back at the 50 day average
The reporting week was characterized by a consolidation below the resistance zone 59'000 - 60'000 USD. On Monday, the area around 57'000 USD, newly regained by the upward movement of the previous week, was held. On Tuesday, a first major selling wave in 12 days led back to 53'250 USD. However, the incipient counter-movement on Wednesday impressively showed that the bulls are still active in the market and let the bitcoin price bounce back to 57'515 USD, which corresponded to an increase of over 8%. A stalemate was the consequence on the following two trading days, in which the price moved within ranges of about 3'000 USD around the 57'000 USD mark. On Saturday, a first attempt to recapture the resistances formed in the previous weeks was made when the price reached 59'000 USD. At the end of the week, the bitcoin price held its ground in the spheres above 58'000 USD.
Decreasing dynamics of the upward trend
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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 of 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 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 12'200 USD towards the end of October 2020. In the following weeks, the positive trend accentuated and led Bitcoin through the 14'000 USD 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 USD 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 lowest point around the 50-day average (light blue line). The fourth correction now brought the price significantly below it for the first time and thus the trend line, which was formed by the respective lows since the beginning of the year, was also breached.
With the current correction, that started on April 18, Bitcoin is leaving the lower area of the channel and thus the trend line formed since the end of January, which has defined the uptrend since then. Also, for the first time since October 2020, there was a sustained break of the 50-day moving average (light blue line), which previously served as a good indicator of the bullish phase that started in November. The structure of the fast-paced uptrend is thus broken. The decreasing momentum is among other things well visible on the daily RSI indicator. Also the leaving of the parabola in the weekly interval (see macro) confirms this. First and foremost, this does not have to mean a sign of a trend reversal, however, the bears are likely to have a say in market events more often in the future.
After the successful defence of the support zone 48'000 – 50'000 USD, the resistance area around 60'000 USD (red) immediately serves as an indicator of the strength of the recent upward movement. A fall below 52'000 USD would nip this in the bud and increase the risk for a renewed correction. In this scenario, extended support is to be expected in the area of 45'000 USD and 41'000 USD, respectively. Looking at the structure in an extended time horizon, a violation of the bullish sentiment and thus a potential trend reversal below 37'500 USD is looming (see next section).
Macro: End of parabolic price discovery
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 intensified. With the push through important resistance zones and a continuous development above the 21-week moving 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. Since then, a strongly accentuated price discovery above this mark has taken 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 the 20'000 USD mark impressively demonstrated the power of the upward movement that has been establishing itself since October. Bitcoin's observable parabolic price discovery mode (yellow) has recently come to an end. Henceforth, a slowdown in the upward movement is to be expected, which makes further and longer-lasting corrections more likely.
In case of a continued price correction, a respect of the previously created supports (green) over the next weeks/months will be necessary to make the initiated price discovery phase sustainable. For the time being, the support zone around 45'000 USD, which was defined by the lows of February and March, remains to be observed. Just below it is also the 21-week average (2), which could reliably indicate bull and bear phases so far. The 37'000 – 39'000 USD region serves as the last bastion of the bulls with supports formed at the beginning of the year as well as the 0.618 Fibonacci point, which has been calculated since the breakout of the old three-year all-time high and the new all-time high.
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