Bitcoin USD daily basis
Bitcoin USD Chart Analysis - Break of the Last Resistance Leads to Another All-Time High
A noteworthy reporting week is behind us. On Monday already, a convincing break through the all-time high of the 8th of January followed. This helped Bitcoin to gain almost 20% and let the price close at USD 46,430. The bulls had already used the successful breakout from a negative chart formation in the previous week to approach the previously reached all-time high. The news of Tesla's Bitcoin investment therefore came at the right time to mark a new all-time high. On Tuesday, the seriousness of the previous day's rise was tested. In a trading range of just over USD 3,000, slightly higher levels than the previous day were reached again. At the end of the day, however, the Bitcoin price was back at the previous day's level at USD 46,450. By the time it was midweek, downturns led back to the 44'850 USD at the close of trading. On Thursday, renewed purchases led the Bitcoin price above the all-time high reached that was reached on Tuesday. On Friday, trading was initially at a higher level, but profit-taking led to a daily closing price at 47'400 USD. A consolidation in narrow trading ranges on Saturday was used on Sunday for a renewed all-time high just below the USD 50,000 mark. The week was thus strong, with consistent continuation of the original break of the all-time high at the beginning of the week.
New all-time high after a month-long correction phase
Review of the Daily Interval
After the price plunge in 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 on January 8. A subsequent correction brought the price back to the USD 30,000 area. A decisive hold of this level led to a series of higher daily highs and lows. Subsequently, the forming negative chart formation (descending triangle) was broken towards the upside and negated. This increased the chances that the previously seen lows just below 30,000 USD already represented the low of the recent correction.
Outlook
The previous week's groundwork paid off surprisingly quickly. The consistent series of higher daily lows since the low reached on January 22 led consistently back to the all-time high at USD 42,000 of January 8. The fulminant break of this at the beginning of the reporting week and the confirmation in the following days testify to the returned bullish momentum. The speed of the rise already takes the features of the market environment before the recent correction. The market phase once again enters the price discovery mode. Thus, there is no visible resistance towards the top for the time being. The zone above USD 40,000, which was broken during the reporting week, serves as the first support.
Further support zones are found in the range of 36,500 - 38,000 USD. Just below this is also the 50-day average (light blue line), which was a good indicator in the recent correction. In the meantime, the 0.618 Fibonacci point is located in the area of 27'000 USD, which has been calculated since the beginning of the breakout through important resistance zones in October and the all-time high.
Macro: New all-time highs
Bitcoin was able to set a higher all-time 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 took place over the last 4 weeks. In the reporting week, the old all-time high was overcome, and this brings Bitcoin once again into price discovery mode in uncharted territory. Resistances are non-existent for the time being.
In case of an incipient correction, respecting the previously created supports (green) over the next weeks/months will be necessary to make the initiated phase of exploration in new price spheres sustainable. Remaining to be observed here is the 0.618 Fibonacci point since breaking out above the old all-time high of 2017 at around USD 30,000. In the event of a continued correction, the 21-week average (2) becomes relevant, which could reliably indicate bull and bear phases so far. This is currently just below 24,000 USD and is rising strongly. Further support zones in the weekly interval have emerged in the area of 20'000 USD.
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.
