Bitcoin USD daily basis
Bitcoin USD Chart Analysis - Sell Off to the 30,000 USD Support Zone
The trend of lower daily trading levels that started on May 12 consistently continued in the reporting week, and finally led to a downright sell-off. The omens were already bad with the break of the 50,000 USD support zone on the weekend of the previous week. Accordingly, the bears took the reins and two trading days with lower daily lows and highs followed on Monday and Tuesday. The respective daily lows at the beginning of the week at 42,300 USD were already close to the 40,000 USD support zone formed in January. On Wednesday, there was a real crash, which led directly through the 40,000 USD support zone and at the low even below 30,000 USD, which represented a daily loss of around 30%. Although the market started a countermovement at the end of the day, which enabled a close at 36,750 USD, sentiment was more than battered. This was as the 200-day average was also broken for the first time in 384 trading days. The two following trading days were volatile, and the 40,000 USD support zone acted as resistance, which could not be regained. An indecisive doji at 37,333 USD on Saturday was followed by a trend continuation on Sunday, which again led to Wednesday's lows.
Setback below meaningful supports
Review Daily Interval
After the mid-March 2020 price plunge, a veritable countertrend was established. This led to the resistance zones abovehal 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. 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 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 USD 65,000 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 serving as support since the beginning of the year formed by the respective daily lows. In the past two weeks, this resulted in an accelerated downward trend, which led below important support zones.
Outlook
With the correction that started on April 18, Bitcoin left the lower area of its channel formed since the beginning of the year and thus the trend line that defined the rapid uptrend since then. There was also a sustained break of the 50-day moving average (light blue line) recently, which previously served as a good indicator of the bullish phase that started in November. With the recent price decline, the 200 day moving average has also been undercut, which has not occurred since April 2020. The bullish structure is battered, but not yet completely broken. The 30,000 USD zone remains interesting, which for the time being served as the bottom of the current sell-off and additionally represents the 0.618 Fibonacci point between the start of the rapid uptrend since late October and the all-time high of mid-April. The daily RSI is in oversold territory at 25 and the MACD indicator is also at historically low levels.
The "major consolidation" expected in the last report came in the form of a rapid selloff. A prolonged undershooting of the 200-day moving average or a future retest and failure of this average would have to be viewed negatively. In the same area around the 40,000 USD are also the resistances, formed by the trading action at the beginning of the year.
A trading range in the area of 30,000 - 40,000 USD seems realistic for the time being. Only a breakout from this range will determine the further direction of travel based on technical conditions.
Macro: Remarkable cracks in the foundation
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 intensified. 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 sell-off wave will be. Bitcoin had equally experienced setbacks of >50% in bull phases in the past. Depending on the point from which one calculates the Fibonacci retracements (start bull market - ATH 65k or breakout old ATH 20k - ATH 65k), we are currently in the interesting zone 0.5 or 0.618. A recapture of the 21-week average is necessary over the next few weeks for a positive picture and would also mean a break of the historical resistances from 48,000 USD. Setbacks at lower levels carry the risk of a forming shoulder-head-shoulder formation, which is to be viewed negatively.
Currently, the weekly lows formed since the beginning of the year are not undercut. 28,000 USD stands for the time being as an indicator for the sustainability of the correction, while resistance is to be expected from 45,000 USD.
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.
