Bitcoin/USD daily basis
Bitcoin USD - Overcoming the 10'500 resistance leads up to 12'000 USD
An eventful reporting week! Monday began with higher prices than the previous week and with a first intraday test over USD 10,000 and a daily closing just below that. A subsequent massive price increase on Tuesday was a tough one, taking the Bitcoin price first through the historical resistance around 10'500 USD, directly to a daily high of just over 11'400 USD. The daily close was close to 11'000 USD. On Wednesday a first setback to USD 10,500 was recorded, but the closing price was already below USD 11,000 again. This was followed by a brief consolidation on Thursday, before climbing back up to higher spheres on Friday and Saturday. These initially peaked on Sunday at USD 12,100. A "flash crash" correction followed on the same day, which resulted in a daily low of USD 10,500. At the end of Sunday's trading, the price returned above the USD 11,000 mark.
Breakthrough through historical resistance
A veritable countermovement established itself after the price slump of mid-March. This led up to the resistance zones starting at USD 10,000. After a renewed rejection at the beginning of June, a consolidation period of almost two months was observed. This was characterised by a series of higher daily lows and lower daily highs (triangle). The series of lower highs was broken on 22 July (markings). This was followed on July 27 by a break through the resistance zone around USD 10,500, which has been established since August 2019 and which Bitcoin has already failed to break several times.
The resistance zone around USD 10,000 was interesting in several respects. For one thing, it contains the 0.618 Fibonacci point (1) of the entire downtrend, which was heralded at the end of June 2019 just below USD 14,000. Secondly, the zone around USD 10,000 simultaneously served as a confirmation of the still bearish trend of lower highs since December 2017 (see next section).
What confirms the sustainability of the recent breakout is that it has established itself above the historical resistance which now serves as support (green). The current correction can be considered healthy after the rapid price increase. The RSI indicator in the daily interval last recorded values of 85 (2), whereas values above 70 are considered overbought. Such RSI values have not been seen since the bull run which started in April 2019 and led Bitcoin from USD 4,000 to almost USD 14,000 within three months (marker).
In the best bullish case, the newly created support in the USD 10,500 - USD 10,000 zone will now no longer be breached. Otherwise, further support is available in the zone around USD 9,000. The 200-day average is also located here.
The next resistance to be taken seriously is just above USD 12,000. This would have to be overcome in the coming weeks in order to legitimize a sustainable trend reversal.
Macro: Series of lower highs broken since end of 2017
Bitcoin set a higher high for the first time in the weekly interval, breaking the prevailing bearish trend since December 2017. The series of lower highs, which lasted for 135 weeks, was thus broken in the reporting week.
In order to change the negative macro picture into a valid trend reversal, the breakout should be legitimized with several weekly candles above the USD 10,000 mark.
An establishment above USD 10,000 and a consistent overcoming of the resistance around USD 12,000 over the next few weeks would argue for a trend reversal. Should the Bitcoin price then consolidate above USD 12,000 again, the chances of an attack on the all-time high of a good USD 20,000 would certainly exist.
A drop in the price that would bring the price back into the USD 9,500 range and lower would damage the positive momentum and argue for a longer consolidation.
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