Weekly Bitcoin USD chart analysis calendar week 35 – 2021

Bitcoin USD daily Basis

Bitcoin USD Chart Analysis - Breaking the 50'000 mark

The reporting week was initially characterized by a consolidation phase, which took place just below the significant resistance zone of USD 50'000. A similar picture emerged as in last week's trading action. On Monday, two trading days that played out in narrow trading ranges just below the 50'000 mark were followed by a correction that led the price back to 47'000 USD. On Tuesday, however, there was no further selling pressure and so the closing price of USD 47'118 was already slightly higher than the previous day. The lack of negative momentum was a first sign that the market is not yet satisfied with a simple bounce off the 50'000 zone. A renewed upward movement followed in the middle of the week, which brought the price closer to the magic area again at USD 48'851. Already on Thursday, the market recorded a second trading session above the 50'000 zone with USD 50'419 at the daily high. Although the cryptocurrency went lower at the close of trading at 49'275 USD, the following three trading days once again had a rising price trend. In steady sections, each marked by higher daily lows, Bitcoin managed to advance to just below the 52'000 zone by the end of the week.

Breakout from upper range of three-month price corridor leads to important resistances

Daily Interval Review

After the price plunge in mid-March 2020, a veritable countermovement established itself. This led to the resistance zones above USD 10'000. 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 USD 10'000 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, is located here. On the other hand, the zone around USD 10'000 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 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 USD 20'000 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 USD 20'000 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 14th. 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, 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. Subsequently, the price consolidated in the corridor USD 30'000 – 40'000 for three months until the recent breakout from the upper range of the corridor.

Outlook

Currently, we are above the 11 weeks lasting price corridor USD 30'000 - 40'000. A "rounding bottom scenario" in the area of the 0.618 Fibonacci point, which is calculated between the start of the rapid uptrend and the new all-time high, has manifested itself in a strong upward movement.

The impressive counter-movement that followed the last failed attempt to break the USD 30'000 support zone came determined and shaped the current positive market environment. The continued bullish price action takes Bitcoin right back to the 50'000 resistance level and back to the area above the 200-day moving average.

The current price area served as support several times between February and May and is now classified as significant resistance. The market is currently showing good momentum, marked by a steady advance into the resistance zone. For the time being, the price action is characterized by a negative RSI divergence. A continued penetration into the area of USD 53'000 would remedy this shortcoming and suggests a test of the all-time high in the near future. An incipient correction is not a leg break for the time being and should not lead back to the zones below USD 46'000 for a sustained positive picture. A longer consolidation in the current range, followed by a series of lower daily closing prices, also carries the risk of an establishing "bull trap".

New all-time high or risk of a bull trap

Review Weekly Interval

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 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 USD 65'000 in mid-April. A consolidation initiated since then ended in a veritable price slide that brought Bitcoin back to the USD 30'000 mark in just two weeks. A subsequent breakout from the 10-week USD 30'000 - 40'000 consolidation area will bring Bitcoin back to the USD 50'000 resistance.

Outlook

The price movements in the past year created a good foundation to sustainably climb to new spheres beyond the all-time highs reached in 2017. The break of the USD 20'000 mark impressively demonstrated the power of the upward movement that has 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.

Bitcoin was able to leave behind the three-month correction phase in the USD 30'000 - 40'000 zone. The consolidation took place in the interesting 0.618 Fibonacci area since the start of the bull market. After breaking out of the upper price band of the three-month corridor, a continued significant counter-move took the price back to the USD 50'000 zone within the past 3 weeks while negating a forming shoulder-head-shoulder formation.

With the holding of the USD 30'000 support in the 0.618 Fibonacci zone, a scenario of a continuing price development, which eventually leads beyond the existing all-time high, remains intact. Such a scenario is reinforced by sustained price action above the 40'000 support zone and a recapture of the 21-week moving average over the near term. A presumed "make it or break it" situation is emerging in the current price area in the following weeks. Here, the market decides whether a price discovery above the all-time high should take place or whether the current upward movement below the all-time high ends in a "bull trap" as in January 2018.