Bitcoin/USD daily basis
Bitcoin USD daily basis – a drop returns bitcoin to USD10,000
The reported week featured a massive price drop by the middle of the week that nullified the previous week's uptrend. Monday and Tuesday were similar to the last trading days, with higher values for each day's lows and highs. Then, the price stabilized at USD 11,500 and shortly crossed the mark of USD 12,000. On Wednesday, a considerable drop returned bitcoin to the first support of USD 11,000. On Thursday, this support was broken and followed by a further powerful correction to above USD 10,000. The price stayed around the USD 10,250 mark in the last three trading days, with daily fluctuations between USD 400-700.
The first test of the newly created support
Review of the daily interval
A veritable countermovement established itself after the price slump in mid-March. This led up to the resistance zones starting at USD 10,000. After a renewed rejection at the beginning of June, an almost two-month consolidation was observed. This was characterized by a series of higher daily lows and lower daily highs. The series of lower highs was broken on 22 July. 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. On the one hand, the 0.618 Fibonacci point (1) of the entire downward movement, which was heralded at the end of June 2019 just below USD 14,000, is located here. On the other hand, the zone around $10,000 also served as a confirmation of the still bearish trend of lower highs since December 2017 (see next section). This zone now counts as a significant support (green).
The break of USD 11,000 support that lasted for good 5 five weeks led on Thursday to a substantial price drop and a direct test of a resistance area of over UDS 10,000 that was hardly overcome previously. This area serves as an essential pillar of a positive trend. The next days will give the first indicator of the market readiness to defend this support. Therefore, again, the resistances are available at USD 11,000, and further, at the area over USD 12,000, that is well-known already. This is significant and serves as an indicator of whether the market demonstrates the seriousness with the newest trend reversal.
If the USD 10,000 falls, the further support of trade activities from the end of April to the mid/late July is expected to be below USD 9,500. In this area, you can find a 200 daily average. (2)
Macro: Series of lower highs broken since end of 2017
Bitcoin was able to 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 interrupted (marker). In order to change the negative macro picture into a valid trend reversal, the breakout should be legitimized by 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 weeks speak for a legitimacy of the trend reversal. If the Bitcoin exchange rate can 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, which would bring the price back into the USD 9,500 range and below over several weeks, would damage the positive momentum and argue for a longer consolidation.
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