Bitcoin USD daily basis
Bitcoin USD - Breakthrough through 12'000 leads to new annual highs
In the reporting week, Bitcoin was able to further expand its outbreak, which had occurred in the previous week. Trading activity at the beginning of the week took place with a consolidation in the USD 13,000 range. With tight trading margins, and little selling pressure on Sunday and Monday, a basis was laid for a further rise in the price. This was already established on Tuesday with a move up to USD 13,800. In the middle of the week, a correction was made, and the trading range was tested again: around USD 13,000. However, this setback was short-lived, and by the end of the day, had already pushed the price back up to USD 13,250. From Thursday onwards, three trading days followed with higher daily lows and highs, which helped the price reach a weekly high of USD 14,120 on Saturday. Sunday was dominated by a consolidation just below the USD 14,000 mark.
Strong resistance will serve as support from now on
Review 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 was established in 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).
Outlook
Bitcoin recently established itself above the newly created support in the USD 10,000 range. This support was confirmed by a re-test in early September, and serves as an important pillar of the positive trend. In the meantime, further significant resistance zones have been overcome. In the previous week, Bitcoin broke through the first resistance around USD 11,300, which had formed as a result of trading activities from late July to early September. After a consolidation phase in this area, a remarkable second rally in the last two weeks led through the more significant resistances around USD 12,300. The latter established itself as early as January 2018 and has since then served as the zenith for the Bitcoin price several times (see macro outlook). Breaking through this zone is a strong indication that the market is serious about the recent trend reversal.
For a sustained healthy positive trend, the recently overcome resistances should now be respected as support in the coming weeks (green). The current strong upward movement is coming from overbought territory on the RSI and MACD indicators (3). Setbacks should find initial support around 12'000 USD and again above 11'000 USD. The latter was caused by the S/R flips in the period July to October (green). This support zone gains in significance as the lower trendline of the channel that has been established since March 2020 (blue) is located here as well. The strength of the latest trend is likely to be measured by this channel in the coming weeks. Should the lower trendline be broken in case of a stronger setback, the USD 10,000, where the 200 daily average (2) is now also moving, is considered an indicator of the bullish trend that has been established since March. However, if this zone is visited or undercut again, a longer lasting consolidation in the range of USD 9'000 - 11'500 can be expected.
A final resistance level, which opposes a "clear sky" scenario up to the all-time high, represents the mark at around USD 14,000 (red). This zone marked the cap of the first significant rally between March and June 2019 and played a role earlier (see next section).
Macro: Trend reversal becoming established
Bitcoin was able to set a higher high for the first time this year in the weekly interval above USD 10,000, breaking the prevailing bearish trend since December 2017. The series of lower highs, which lasted for 135 weeks, was interrupted with the breakthrough.
Since the breakthrough of the bearish trend, the signs for a valid trend reversal have been increasing. This can be achieved by a continuation of the weekly candlesticks within the established trend channel (1), as well as further development above the 21 week average (2).
A sustained respect for the newly created supports in the range of USD 11'300 and USD 10'500 over the next weeks/months underlines the legitimacy of the trend reversal. If a consolidation at the newly climbed level takes place in the coming weeks with respect to the aforementioned supports, the signs are favorable for a breach of the last resistance zone at USD 14,000 (red). If this last hurdle is overcome on a sustained basis, there is not much more in the way of a renewed attack on the all-time high of a good USD 20,000.
A drop in the price, which would push the price back into the areas below USD 10,000 over several weeks, would damage the positive momentum and would argue for a longer-term consolidation in this area.
