Bitcoin USD daily basis
Bitcoin USD Chart Analysis - Continued Consolidation with Lower Highs
At the beginning of the reporting week, we saw a continuation of the consolidation phase above the 30'000 level. This is a level that is emerging as a support zone since the correction initiated since the all-time high was reached. On Monday, trading started at around USD 32'000. The high reached during the day at 34'962 could not be held and so the Bitcoin price closed at the same level of the previous day. The created classic "Gravestone Doji" seemed to unsettle some market participants on Tuesday. Drops during the day led to USD 30'850 in the daily bull, but the closing price once again came to rest above the USD 32'000 zone. On Wednesday, a wave of selling brought the price to 29'200 USD in the daily low, the closing price could take place just above the 30'000 USD. Since reaching the all-time high, the 30'000 support zone was thus tested for the fourth time, but each time with higher daily lows. On Thursday, another weaker short-term break of the 30'000 zone followed. The bulls took advantage of this weakness and took the reins without further ado. This led to a daily close at USD 33'480. On Friday, the market saw the day with the highest volatility of the reporting week. Triggered by a profile change in Elon Musk's Twitter profile, the share price really shot up. An impressive daily high of USD 38'677 was reached in the process. However, the price corrected back to USD 34'000 on the same day. By the weekend, the Bitcoin price was moving in the realms of 34'000 USD. On Sunday, selling pressure increased again and led to a weekly close at around 33'000 USD.
Exuberant price discovery comes to a temporary end
Review Daily Interval
After the price plunge of mid-March 2020, a veritable countermovement established itself. This led to the resistance zones from 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 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 14,000 USD, 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. The aforementioned resistance zone had been effective since January 2018 and served as a zenith for the price several times since then. 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 break through the old all-time high at USD 20,000 saw a strong accentuation of the uptrend. The continued parabolic upward movement led to a new all-time high at 42'000 USD and came to a temporary end on January 8.
Since the all-time high, a descending triangle (1) was formed with several corrections reaching the USD 30,000 zone with decreasing volatility. An attempt to break out of the upper descending trend line, which has been forming since the all-time high, failed during the reporting week.
It remains to be seen whether this is the beginning of a more pronounced correction or just a short-term consolidation. Temporarily, the Bitcoin price found support at the 50-day moving average. However, on a daily basis, the price structure is negative with lower highs and in frequency increasing tests of the support zone around USD 30,000. This negative structure can be negated with a sustained breakout through the 35'000 zone, which recently served as resistance. To shape the picture positively in the short term, a series of establishing higher daily lows above the 30'000 zone would be a good basis. For now, the USD 30,000 zone (green) serves as a first indicator of the extent of the recent correction.
For a sustainable establishment of the uptrend, the recently overcome resistances should be respected as support in the coming weeks (green). Just below the first support zone is the 50-day moving average (light blue line). More fundamental support is expected around USD 25,000. In this area is the 0.618 Fibonacci point, which has been calculated since the beginning of the breakout through important resistance zones in October and the all-time high (2). This is followed by another support zone near the old all-time high at around USD 20,000.
Macro: New all-time highs
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 the break of the bearish trend, signs of a valid trend reversal have been building up. 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. This was accomplished in mid-December 2020. Since then, a strongly accentuated price discovery above this mark has been taking place.
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 USD 20,000 impressively demonstrated the power of the upward movement that had been established since October. It culminated in a parabola, which reached its temporary high at a good USD 42,000. Corrections become more likely after such accentuated price increases. Such a correction is now taking place. The zone above 28,000 USD can be seen as the first support. Here is the 0.618 Fibonacci point, which is calculated since the breakout above 20'000 USD and the current all-time high. In case of a continued correction, a sustainable respect of the previously created supports (green) over the next weeks/months will be required in order to continue to decisively advance into new price spheres in the future. The first support in the weekly interval is located at around USD 20,000. This support zone is gaining in significance, as the 21-week average is now also approaching the area. The area between 14,000 and 12,000 USD serves as further support zones. However, reaching these levels would cause lasting damage to the entire structure.
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