Bitcoin USD daily basis
Bitcoin USD Chart Analysis - Level Finding After "Flash Crash"
The reporting week was marked by a bounce off the 50,000 resistance zone and a continued stabilization in the area of the 200-day moving average. Monday was immediately marked by the largest price loss of the week. This, after a sustained breakthrough the important 50,000 zones failed on Sunday. In the course of the day, the price corrected from 50,000 to 45,809 USD at the daily low, to finally stabilize at 46,640 USD. Exactly in this area is the 200-day moving average, which already served as support in the previous week. It was therefore not surprising that on Tuesday and Wednesday with prices just below 48,000 USD slightly higher price trends prevailed. From Thursday, however, the previously observed weak phase set in again, which led to renewed price losses and thus back to the area of 46,000 USD. The weekend was marked by directionless trading with slight recovery tendencies. It resulted in a weekly close in the area of 47,000 USD and thus exactly at the 200-day moving average.
Stabilization at the 200-day moving average
Review daily interval
After the price drop 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 several 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 the 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 the 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 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 blowing 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 it's new all-time high just below USD 65,000 on April 14. However, the rapid upward movement was abruptly stopped in mid-May and led back to the 30,000 USD areas. Subsequently, the price consolidated in the USD 30,000 - 40,000 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 area of 52,000 USD. After an initial failure, Bitcoin was able to overcome the resistance zone on October 6 and most recently recorded highs above the old all-time high from mid-April for the first time.
Daily Interval Outlook
A roundig bottom scenario in the area of the 0.618 Fibonacci point, which is calculated between the start of the rapid uptrend and the old all-time high of mid-April, has manifested itself in a strong upward movement. This eventually led above the all-time high of mid-April. 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 by the retest of the 40,000 zones at the end of September and the subsequent impressive countermovement. At the latest after overcoming the 52,000 resistance level, it was obvious that the market was serious about its mission to reach an all-time high.
The creation of a new all-time high in the USD 69,000 area led to profit-taking, which brought Bitcoin back to the important 50,000 support area. This area has seen quite a few price moves since the beginning of the year and is where the trend line was located, formed by the higher lows since the trend reversal began in late July. The break of this support led to a brief visit of the price area above USD 42,000. Meanwhile, the consolidation that began thereafter took place in the area of the 200-day moving average at around USD 47,000.
Bitcoin is still in the digestion phase of the price plunge that occurred just over two weeks ago. It is obvious that the 50,000 zone, which previously acted as support, is now acting as a weighty resistance. The first bounce off this area took place during the reporting week. From now on, this resistance area serves as a reliable bullish momentum indicator. A recapture of this area should be viewed positively, while a bounce suggests a revisit of the $43,000-$45,000 area. Currently, the market continues to be characterized by a tendency of lower daily highs or lows. The daily MACD indicator indicates a bottoming. The bullish structure, strengthened by the 189-day excursion to the break of the old all-time high in the USD 65,000 area, is battered, but the ingredients are still right for a medium-term continued price discovery above the new all-time high, as long as the zone 42,000 USD is not undercut.
The new price discovery phase ushered in
Weekly Interval Review
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 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 USD 65,000 in mid-April. A consolidation initiated since then ended in a veritable price slide that took Bitcoin back to the USD 30,000 mark in just two weeks. A subsequent breakout from the 10-week consolidation area of 30,000 - 40,000 USD and a subsequent successful retest of the upper range at 40,000 USD brings Bitcoin in an impressive countermovement last above the all-time high created in April.
Outlook weekly interval
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 the USD 20,000 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 USD 30,000 - 40,000 zone after 3 months. This consolidation also took place in the interesting 0.618 Fibonacci area, which has been calculated since the start of the bull market and the all-time high of April. The breakout from the upper price band of the three-month corridor was another sign that the bulls had not yet given up the sceptre. The onset of the countermovement, which led back to the 52,000 resistance, negated a forming shoulder-head-shoulder formation and once again underscored the claim for a continued bull phase.
The justification for a price discovery beyond the all-time high of mid-April was consolidated by the price movements of the last weeks. 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. Price movements above this mark have so far indicated a rapid continuation of price discovery in higher spheres. Exactly this zone was now undercut again in the reporting week. The bullish structure is thus not yet broken, but the market is showing a slower pace than would have been the case with price action above this zone.
The weekly RSI index (3), which showed a negative divergence to the price action despite an all-time high, had indicated that the momentum was on weak legs. It remains to be seen how the price behaves in the current area, as the seminal 21-week moving average (2) is also located here. A consolidation in this area is for the time being no leg break, as long as the development of higher lows since July is not broken. Only a drift into the 40,000 zones would seriously endanger this trend and thus the Mission continued price discovery beyond the all-time high.
Disclaimer
All information in this publication is provided for general information purposes only. The information provided in this publication does not constitute investment advice and is not intended as such. This publication does not constitute and is not intended as an offer, recommendation or solicitation to invest in any financial instrument, including cryptocurrencies and the like. The contents contained in the publication represent the personal opinions of the respective authors and are not suitable or intended as a basis for decision-making.
Risk notice
Investing in cryptocurrencies, is fundamentally associated with risk. The total loss of the invested capital cannot be excluded. Cryptocurrencies are very volatile and can therefore be exposed to extreme price fluctuations in a short period of time.
