Bitcoin USD daily basis
Bitcoin USD chart analysis – regaining the 200 daily average
During the reporting week, the question arose as to whether the new situation of the 40,000 resistance zone that was recently overcome can exist. The omens were good, as Bitcoin was able to overcome the resistance zone a second time on Saturday the previous week and mark a new daily high for 79 days at USD 42,869. After a consolidation in the USD 44,000 range on Sunday, there was a further upward movement on Monday, which already pushed the price to USD 46,285. Consolidation followed over the next three trading days with lower daily closing prices, which took place in narrow trading ranges and brought the price back to USD 44,422. On Friday, an outbreak of the mini “bull flag” of the previous days caused a mighty price increase, which was + 7.6% as the highest of the week. The new level of USD 47,833 was briefly exceeded on Saturday for the time being, but the onset of sales left the price slightly lower than the day before at USD 47,109 by the end of the day. Another price decline on Sunday brought Bitcoin back into the USD 46,000 area.
Breakout from the upper area of the three-month price corridor
Review daily interval
After the share price crash 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 nearly two-month consolidation phase, a breakthrough through the fundamental resistance zone followed on July 27, which has been established since August 2019 and Bitcoin has already failed several times to date.
The resistance zone around USD 10,000 was interesting in several ways. On the one hand, this is the 0.618 Fibonacci point of the entire downward movement, which was ushered in at just under 14,000 USD at the end of June 2019. On the other hand, the zone around USD 10,000 also acted as confirmation of the still bearish trend of lower highs since December 2017 (see macro view on a weekly basis). Bitcoin has been 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 at the beginning of November 2020 through the 14,000 resistance and at the beginning of December for the first time close to the all-time highs of USD 20,000, which have remained untouched for 158 weeks since the 2017 boom.
Since the breakout caused by the important 14,000 resistance at the beginning of November, things have happened in quick succession. With the breakthrough through the old all-time high at USD 20,000, the upward trend was strongly accentuated, which caused the Bitcoin price to mark its new all-time high just below USD 65,000 on April 14th. The rapid upward movement has so far been characterized by 3 corrections, each of which found its lowest point around the 50-day average (light blue line). The fourth correction, however, led significantly below this for the first time and so there was also a breach of the trend line, which has served as a support since the beginning of the year, shaped by the respective daily lows. In the past few weeks, this has resulted in an accelerated downtrend that has led to important support areas. As a result, the price consolidated in the corridor of USD 30,000 – 40,000.
For the first time, we are above the price corridor of USD 30,000 – 40,000 that has persisted for 11 weeks. A “round bottom scenario” in the area of the 0.618 Fibonacci point, which is calculated between the start of the rapid upward trend and the new all-time high, has manifested itself in a strong upward movement.
The impressive countermovement that followed the last failed attempt to break through the USD 30,000 support zone certainly came and shapes the current positive market environment. The ongoing optimistic price development in the reporting week brought Bitcoin back into the area above the 200-day average.
The current price activity confirms a renewed positive momentum and, as suspected last week, suggests an imminent test of the 50,000 resistance zone. As long as the onset of price declines do not lead back to the zones below USD 42,000, this scenario remains realistic.
Approaches to a healthy consolidation
Review week interval
In 2020, Bitcoin was able to set a higher high above USD 10,000 for the first time in weekly intervals, which has broken the prevailing bearish trend since December 2017. This interrupted the series of lower highs that spanned 135 weeks (1).
Since this first overcoming of the bearish trend, the signs of a valid trend reversal have intensified. With the breakthrough through important resistance zones and a continuous development above the 21 week average (2), the chances of reaching the all-time high set in 2017/18 increased noticeably. This was done in mid-December 2020. This was followed by a strongly accentuated price finding above this historical level, which in mid-April produced a new all-time high of USD 65,000. A consolidation initiated since then ended in a veritable price slide that brought Bitcoin back to the USD 30,000 mark in just two weeks.
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 strength of the upward movement that has been establishing itself since October. The rapid rise in the price was now suddenly interrupted with a fall, which brought Bitcoin even below the 21-week average (2) that had been reliable bulls or bear market phases in the past.
It remains to be seen how sustainable the current correction phase will be. In the past, Bitcoin had equally experienced setbacks of> 50% in bull phases. The price has consolidated in the interesting 0.618 Fibonacci zone since the start of the bull market. The upward movement of the past week reduced or even negated the risk of a shoulder-head-shoulder formation. Sustainable price activity above the 40,000 support zone and regaining the 21-week average over the near future is necessary for a sustained positive picture. A “make it or break it” situation can be expected from USD 52,000. Here the market decides whether a renewed attack on the all-time high should take place or whether the countermovement towards the all-time high ends in a “bull trap” like in January 2018.
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