Bitcoin USD daily basis
Bitcoin USD Chart Analysis - Renewed rejection at 40'000 USD resistance zone
The reporting week started auspiciously for the bulls. On Sunday evening, the series of lower highs formed since May 19 was broken, indicating a change in sentiment. The break came with a close of 39'000 USD on Sunday and was underlined on Monday. Follow-up buying led accordingly to the 40'000 resistance zone and pushed the Bitcoin price to 40'539 USD. On Tuesday, however, Bitcoin lacked the strength to sustainably lift above these resistances, and a slightly lower daily closing price than the previous day followed at 40'158 USD. Interestingly, this weakening momentum was dominant in the following 5 trading days and led to continuously lower daily closing prices. While on Wednesday and Thursday the level of 38'350 USD could be held, on Friday further selling pressure led back below 36'000 USD. Trading over the weekend followed this pattern, resulting in a new weekly low on Sunday at 33'325 USD. Most recently, the price was able to recover to a certain extent by the end of the day.
Bottom formation above 30'000 USD mark
Review Daily Interval
After the mid-March 2020 price plunge, a veritable countermovement established itself. This led to the resistance zones above 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 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 low point around the 50-day average (light blue line). The fourth correction, however, led for the first time clearly below it and thus it also came to a violation of the trend line, which has served as support since the beginning of the year, formed by the respective daily lows. In recent weeks, this resulted in an accelerated downward trend, which led below important support zones. As a result, the price consolidated in the corridor 30'000 - 40'000 USD.
After the recent price decline, the Bitcoin price is consolidating in the 30'000 - 40'000 USD range, as expected. Price action is now taking place below the 50-day average as well as the 200-day average. The latter has not been undercut since April 2020. The bullish structure is battered, but not yet completely broken. The 30'000 zone remains interesting, which served as the bottom of the current sell-off for the time being. This area also represents the 0.618 Fibonacci point between the start of the rapid uptrend since late October and the all-time high of mid-April.
A breakout from this range will dictate the technical direction of travel going forward. The 30'000 area represents one of the last bastions of the bulls. The 40'000 USD resistance zone, consisting of historical price action from January as well as the 200-day average serves as the first indication of a return of bullish momentum. Currently, time is running against the bulls, as the sell-off of the previous weeks has caused considerable damage to the overall structure. For example, trading below the 200-day moving average has never been recorded before in an intact bull market.
Although Bitcoin was able to break the series of lower highs that had lasted for 24 days during the reporting week, the subsequent countermovement failed again at the resistance zone above 40'000 USD. A returning positive momentum looks different, however, the selling pressure near the 30'000 zone also remains within limits. Continued trading activity in these widths seems likely for the time being. A re-climb of the 42'000 USD resistance zone would improve the technical picture in the long term, while a move below the 30'000 zone would make a visit to the old all-time high of 20'000 USD seem likely.
Macro: Notable cracks in the fundamentals
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.
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 65'000 or breakout old ATH 20'000 - ATH 65'000), 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 starting at 48'000 USD. Setbacks to lower levels carry the risk of a forming shoulder-head-shoulder formation, which should be viewed negatively.
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