Bitcoin USD daily basis
Bitcoin USD chart analysis – consolidation below the 50,000 mark
The reporting week was characterized by a phase of consolidation, which took place just below the significant resistance zone of USD 50,000. After two days of breather at the newly climbed level of the previous week, Bitcoin tried to conquer the areas of the 50,000 mark on Monday. In the course of the day, a new daily high of USD 50,505 was achieved, but by the end of the day the price corrected to USD 49,294 and thus fell below the resistance zone again. Correspondingly, there were some “spoiler sales” on Tuesday, bringing the price back to USD 47,699 by the end of the day. A rebound set in on Wednesday, bringing the price back to $ 48,962. Renewed surrenders led Bitcoin to its weekly low of USD 46,867 on Thursday. A countermovement that began on Friday resulted in a daily closing price at the level of the opening price from the previous day. This stalemate persisted until the weekend and so the price moved around the USD 49,000 area at the end of the week.
Breaking out of the upper area of the three-month price corridor leads to groundbreaking resistance
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 began 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, which has led to important support areas. As a result, the price consolidated in the corridor 30,000 – 40,000 USD for three months, until the most recent breakout from the upper part of the corridor.
For the first time, we are above the 11-week price corridor of USD 30,000 – 40,000. 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 brings Bitcoin directly to the 50,000 resistance level and thus back into the area above the 200 daily average.
As suspected, Bitcoin tested the USD 50,000 resistance area again in the reporting week. This zone served as a support several times between February and May and is therefore classified as a significant resistance. The mentioned breather is underway and a stalemate is emerging just below the important resistance zone. A direct breakthrough would be a strong sign and suggest that the all-time high will test soon. The onset of a correction is not a big deal for the time being and should not lead back to the zones below USD 42,000 for a sustained positive picture. A longer consolidation below the 50,000 range, coupled with lower daily closing prices, also carries the risk of a “bull trap” becoming established.
New all-time high or danger of a bull trap
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 of 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. A subsequent breakout from the 10-week consolidation area of USD 30,000 – 40,000 brings Bitcoin back to the 50,000 resistance level.
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 bull or bear market phases in the past.
Bitcoin left the three-month correction phase in the USD 30,000 – 40,000 zone behind. The consolidation has been in the interesting 0.618 Fibonacci area since the start of the bull market. After breaking out of the upper price band of the three-month corridor, a continued significant countermovement led the price back to the USD 50,000 zone over the past 3 weeks and at the same time negated a shoulder-head-shoulder formation.
With the 30,000 support in the 0.618 Fibonacci zone, a scenario of a continuing price development that ultimately leads beyond the existing all-time high remains intact. Such a scenario is reinforced by sustained price developments above the 40,000 support zone and a recovery of the 21-week average over the near future. A presumed “make it or break it” situation emerges in the current price area in the following weeks. Here the market decides whether pricing should take place above the all-time high or whether the current upward movement below the all-time high ends in a “bull trap” like in January 2018.
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