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Bitcoin USD chart analysis – calendar week 36/21




Bitcoin USD daily basis

Bitcoin USD

Charts: TradingView.com

Bitcoin USD chart analysis – sustainable overcoming of the 50,000 mark fails

The reporting week got off to a promising start, but a sell-off on Tuesday put an abrupt end to the bulls’ dreams. At the end of the previous week, trading above the 50,000 mark was registered on Sunday for the first time in 113 days at USD 51,800. Accordingly, the trend towards rising exchange rates, which had its origins in the previous reporting week, continued on Monday and reached another daily high of USD 52,698. But Tuesday was tough. The first profit-taking led back to the upper range of the 50,000 mark in the early trading hours. A subsequent break in the newly created support zone led to liquidations on a large scale, which resulted in daily lows below USD 43,000. At the end of trading, the situation relaxed a little and the price stabilized at USD 46,755 at the end of trading. The 20% drop in price of the previous day, calculated from the extreme levels, was acknowledged with further taxes on Wednesday, but in more manageable quantities and so Bitcoin closed the day at 46,100 USD or a good 1.5% lower. A Thursday with a similar closing level was followed by renewed selling pressure on Friday, which caused the price to drop again lower than the trading day at USD 44,861. The weekend was marked by a consolidation in the area of ​​45,000 USD.

Breaking out of the upper area of ​​the three-month price corridor leads to groundbreaking resistance

Bitcoin USD

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 then all-time highs of USD 20,000, which have remained unaffected 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 30,000 – 40,000 USD for three months, until the most recent breakout from the upper part of the corridor. This leads directly to the resistance zones that formed between February and May.




outlook

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 definitely came and brought Bitcoin straight to the 50,000 resistance level. A sustainable establishment above this range failed in the reporting week and led to a steep price correction.

As mentioned several times, the USD 50,000 price area served as support several times between February and May and can be classified as a significant resistance. The market was impressively reminded of this fact during the reporting week. The negative RSI divergence recently indicated a possible rebound. The current stabilization in the support area of ​​45,000 USD, close to the 50-day average, is positive for the time being. The zone serves as the first indication of the market condition. Another drift should end in the USD 41,000 region at the latest in order not to jeopardize the positive momentum since the end of July. Any longer consolidation, marked by a series of lower daily closing prices, carries the risk of a “bull trap” becoming established.

New all-time high or danger of a bull trap

Bitcoin USD

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.

outlook

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.

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 price events above the 40,000 support zone and a sustainable 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.


Disclaimer of liability
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 an offer, recommendation or solicitation to invest in any financial instrument including cryptocurrencies and the like and is not intended as an offer, recommendation or solicitation. The contents contained in the publication represent the personal opinion of the respective authors and are not suitable or intended as a basis for decision-making.

Risk notice
Investments and investments, especially in crypto currencies, are generally associated with risk. The total loss of the capital employed cannot be ruled out. Cryptocurrencies are very volatile and can therefore be exposed to extreme price fluctuations in a short time.


Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.
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