Bitcoin USD daily basis
Bitcoin USD Chart Analysis - Break of the 40,000 Support Zone
In the reporting week, the first bottom at the important 40,000 support was sustainably broken. Already on Monday, renewed selling put further pressure on the price, which had already been weakened by the previous weeks. At USD 42,220, the price entered Tuesday slightly lower than the previous day. On Tuesday, the price recovered slightly with 42,387 USD at the close of trading, after another lower daily low was marked by the trading day with 41,403 USD. A Wednesday dominated by further reductions showed a renewed price decline at 41,677 USD. Thursday started positively for the time being and recorded an appealing daily high of USD 43,591. After that, however, the prevailing market dynamics quickly set in, which ultimately resulted in a daily close at 40,743 USD just above the support zone already tested 10 days ago. With this, the last bullish "hopium/momentum" was extinguished and the bears took the opportunity on Friday with a renewed attack on the 40,000 support. As a result, the bitcoin price broke through the important mark without resistance, which consequently ended in the biggest daily loss of the week at $36,503. Over the weekend, the selling wave continued on a weakened scale, resulting in a daily low of 34,025 USD and a daily close at 35,175 USD. On Sunday, indecisive trading let the bitcoin price exit the week in the 36,000 USD area.
Break of groundbreaking supports
Daily Interval Review
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 of almost two months, a breakthrough through the fundamental resistance zone followed on July 27, 2020, which persisted since August 2019 and accordingly caused Bitcoin to fail several times already.
The area around USD 10,000, which served as resistance, 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, was located in this price area. On the other hand, the zone around USD 10,000 simultaneously acted as a witness of the still bearish trend from lower highs since December 2017 (see the 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 initial confirmation of a trend reversal of the bear market that had persisted since 2018 with the break of the resistance zone around USD 12,200 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.
With the breakthrough of the old all-time high at USD 20,000, the trend reversal was definitely heralded. Accordingly, there was a strong accentuation of the uptrend, which brought the Bitcoin price to its new all-time high just below 65,000 USD in just over 4 months. However, the rapid upward movement was abruptly halted in mid-May 2020, taking Bitcoin back to the USD 30,000 areas. After a three-month consolidation phase, the upward movement was continued no less spectacularly after a "rounding bottom" in the 0.61 Fibonacci area, which finally ended with a new all-time high at USD 69,000 in October 2020 after a "retest" of the 40,000 zone. Since then, a strong correction phase has dominated once again, which is currently leading the Bitcoin price back to trend-determining price territories.
Outlook daily interval
The failure to reach the 50,000 zone, which is now acting as resistance, was followed by a harsh correction that brought the bitcoin price back to the important 40,000 support area in 11 days. The subsequent stabilization in the reporting week failed at 44,000 already below the 46,000 resistance and testified to continued weakness. The retest of the 40,000 support was the logical consequence and the last bastion of the prevailing uptrend fell without resistance.
The unsuccessful recapture of the groundbreaking 50,000 resistance led Bitcoin to the trend-setting 40,000 support zone in recent weeks. The undershooting of this area during the reporting week indicates an end to the rapid price discovery, which started at the end of 2020 and was impressively continued in mid-July 2021. Just 73 days after the all-time high reached USD 69,000, the break of the 40,000 support zone now suggests a price change. Accordingly, the further direction of travel could turn out to be longer sideways movements with a slightly positive trend. A trading range in the range of 30,000 - 40,000 USD lasting over the next time thus appears likely for the time being.
The bull run, which has lasted over 401 days, seems to be running out of steam. Important indications of the further price trend will be the 40,000 zone, which is now serving as resistance, as well as the area around 30,000 USD, which is acting as support.
New price discovery phase shows weakness
Weekly Interval Review
Bitcoin was able to set a higher high above USD 10,000 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 became stronger. 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 scenario was completed in mid-December 2020. This was followed by a strongly accentuated price discovery above this historical zone, which produced a new all-time high of USD 65,000 in mid-April. A consolidation initiated since then ended in a veritable price slide that brought Bitcoin back to the 30,000 USD mark in just two weeks, even below the 21-week average (2) that has defined reliable bull or bear market phases in the past.
However, a subsequent breakout from the 10-week USD 30,000 - 40,000 consolidation area and a subsequent successful "retest" of the upper bandwidth of this channel most recently took Bitcoin above the all-time high created in April in an impressive countermovement. After the creation of the new all-time high in the 69,000 USD area in November 2021, a vehement correction phase set in again, analogous to the pattern observed in May. This initially led to the break of the 50,000 support zone, which then promptly caused a bounce in this area, which now acts as resistance. Accordingly, the last few weeks were once again characterized by the correction phase that has dominated for two months now and even caused Bitcoin to break through the important 40,000 support zone most recently.
Outlook weekly interval
The massive bull phase, which has lasted since July 2021 and originated from the healthy 0.618 Fibonacci area, which has been calculated since the start of the bull market and the all-time high of April, has recently been put to the test. The undershooting of the 40,000 area makes a rapid continued price discovery beyond the 69,000 all-time high a distant prospect for now. The market is setting a slower pace with the risk of falling into a bear market.
The series of higher weekly lows and highs, respectively, since October 2020 is intact, but significant cracks have appeared in the foundation due to the undershooting of the 40,000 zone. The break of the trend line since the start of the uptrend and a negative looking "Head and Shoulder" formation complete the deterioration of the technical picture. The weekly RSI index (3), which showed a negative divergence with the price trend despite an all-time high, had indicated that the momentum was on weak legs. The correction in the reporting week now impressively confirmed the picture of this indicator.
Since the all-time high at USD 69,000 two and a half months ago, the bitcoin price has corrected by around 50%. Historically, such price behaviour has been observed more often even in bull market phases. The ultimate decisive battle between the bulls and bears is likely to take place in the 30,000 area. In this zone is the 0.618 Fibonacci area, which has been calculated since the beginning of the bull market and the all-time high. A sustained undershooting of this zone would also undercut the price area already contested in July 2021, which would come close to bear market confirmation. For the time being, the 40,000 resistance level and the aforementioned support zone serve as indicators for the further price trend.
Disclaimer
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