Weekly Bitcoin USD chart analysis calendar week 42 – 2021

Bitcoin USD daily basis

Bitcoin USD chart analysis - all-time high cracked

During the week under review, Bitcoin not only defended its impressive gains from the previous week, but managed to extend on them. This ultimately led to a surpassing of the old all-time high in the 65’000 USD area on Wednesday, which came about in mid-April. The basis for the breakthrough was consolidated on Monday, with a further consolidation in the area of 62’000 USD. The two previous trading days already contained this price pattern. Strong price gains on Tuesday then led to 64'272 USD at the close of the day, just below the all-time high. On Wednesday, with the prevailing bullish momentum in the market, it was easy to reach a new all-time high at the close of trading at 65’979 USD. Within the trading day, a daily high of 67'000 USD was reached. However, the new milestone was used for initial profit-taking on Thursday, which brought the price back to 62’176 USD. A lower daily closing price of 60’677 USD was also registered on Friday. The weekend played out in narrow trading ranges, just above the 60'000 USD mark.

Incipient consolidation after new all-time high

Review daily interval

After the price plunge of mid-March 2020, 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 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 10’000 USD 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 10’000 USD 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 10’000 USD area since the end of July 2020, and provided a first confirmation of a trend reversal with the break of the resistance zone around 12’200 USD 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.

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 20’000 USD saw a strong accentuation of the uptrend, which saw the Bitcoin price mark its new all-time high just below 65’000 USD on April 14. However, the rapid upward movement was abruptly stopped in mid-May and led back to the 30’000 USD area.  Subsequently, the price consolidated in the  30’000 - 40’000 USD corridor for three months, until breaking out of the upper range of the corridor at the end of July. The subsequent countermovement led to the historical resistance in the 52'000 USD area. After an initial failure, Bitcoin was able to overcome the resistance zone on October 6, and recorded highs above the old all-time high from mid-April for the first time during the reporting week.

Outlook

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 all-time high, has manifested itself in a strong upward movement. This eventually led above the all-time high of mid-April during the reporting week. Since the bottoming in the 0.618 Fibonacci area, such a scenario moved more and more into the realm of potential possibilities. This situation was recently strengthened with the successful retest of the 40'000 zone at the end of September, and the subsequent impressive countermovement. At the latest, after overcoming the 52'000 resistance level, it was clear that the market was serious about its mission to reach an all-time high.

During this week, the market marked a new all-time high of 66’000 USD. On its 189-day path, the price action first negated a threatening "head and shoulders" formation and ultimately a possible constellation of a classic bull trap. The ingredients are thus right for a continued price discovery beyond the 66'000 USD. For the time being, the levels of 56’000 USD and 52’000 USD serve as support zones, where the 50-day average is also moving in the meantime.

New all-time high still has to prove itself

Review Weekly Interval

Bitcoin was able to set a higher high above 10’000 USD 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 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 65’000 USD in mid-April. A consolidation initiated since then ended in a veritable price slide that took Bitcoin back to the 30’000 USD mark in just two weeks. A subsequent breakout from the 10-week consolidation area 30'000 - 40'000 USD, and a subsequent successful retest of the upper range at 40'000 USD brings Bitcoin of an impressive countermovement within the reporting week beyond the all-time high created in April.

Outlook

The price action over the past year has created a good foundation to sustainably climb to new spheres beyond the all-time highs reached in 2017. The break of the 20’000 USD mark impressively demonstrated the power of the upward movement that had been establishing itself since October. The rapid price increase was abruptly interrupted in mid-April, with a price drop that 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 overcome the subsequent correction phase in the 30’000 - 40’000 USD zone after 3 months. This consolidation also took place in the interesting 0.618 Fibonacci area since the start of the bull market. The breakout from the upper price band of the three-month corridor was a first sign that the bulls had not yet given the scepter out of their hands. The incipient countermovement, which led back to the 52’000 USD resistance, negated a forming shoulder-head-shoulder formation and again underlined the claim of a continued bull phase.

The justification for a price discovery beyond the all-time high was consolidated last month. A "retest" of the 40’000 zone, which from then on served as support and where the 21-week average sometimes also runs, was successfully completed at the end of September. The bullish momentum was crowned in recent weeks with the break of the 52’000 resistance zone.  Although a weekly close above the old all-time high has been missing so far, the claim for a price discovery in the area above 65’000 USD was impressively underlined. As an indicator of sustainability, the weekly RSI index remains to be observed for the time being (3), which so far shows a negative divergence to the price action. An incipient correction should come to an end in the 50 '000 USD area at the latest, in order to continue to give a sustainable price discovery scenario above 65’000 USD good chances.