Bitcoin USD daily basis
Bitcoin USD Chart Analysis – Short correction after cracking the all-time high
On Monday, the bitcoin price moved within a narrow trading range at the 19’000 USD area. We recall that the week before, the all-time high of 2017 was exceeded with nearly 20,000 USD. Tuesday was dominated by declines and led the price back to 18’295 USD at the end of the day. The course of trading on Wednesday, Thursday and Friday was influenced by further selling pressure, which resulted in lower daily lows- and highs on each day. On Friday, the weekly low of 17,580 USD was reached and no more selling pressure emerged. In the three-day correction phase, daily closing prices were observed, which were well above the respective daily lows. Accordingly, the selling pressure lost momentum and so there was a first major countermovement on Saturday, which brought the price with 18’850 already close to the 19’000 USD mark again. Sunday was again positive and led the price up to 19,250 USD.
Breakthrough through 14’000 USD leads to parabolic rise
Review Daily Interval
A veritable countermovement established itself after the price slump in mid-March. This led up to the resistance zones starting at USD 10,000. After a renewed rejection at the beginning of June, an almost two-month consolidation was observed. This was characterized by a series of higher daily lows and lower daily highs. The series of lower highs was broken on 22 July. This was followed on July 27 by a break through the resistance zone around USD 10,500, which has been established since August 2019 and which Bitcoin has already failed to break several times.
The resistance zone around USD 10,000 was interesting in several respects. On the one hand, it contained the 0.618 Fibonacci point of the entire downtrend, which was heralded at the end of June 2019 just below USD 14,000. On the other hand, the zone around USD 10,000 simultaneously served as a confirmation of the still bearish trend of lower highs since December 2017 (see next section). This zone now counts as a significant support (green).
Bitcoin has been able to establish itself above the newly created support in the USD 10,000 zone since the end of July. This support was confirmed by a re-test in early September and has since then served as the beginning and important pillar of the recent positive trend. Since then, further significant resistance zones have been overcome. On October 21, for example, the resistance zone around USD 12,200 was breached, which was established as early as January 2018 and has served as the zenith for the Bitcoin price on several occasions thereafter (see macro outlook). In the following weeks, the positive trend intensified and led Bitcoin to the “last visible resistance” at USD 14,000, before the all-time high.
At USD 14,000, an important resistance that stood in the way of a “clear sky” scenario up to the all-time high was passed. An impressive act of strength and a first-class proof that the market is serious about the trend reversal that has been initiated this year. The breakthrough was reinforced by the simultaneous break of the upper trend line of the trend channel that has been forming since March (light blue). This led to a strong accentuation of the uptrend from the beginning of November, which most recently brought the Bitcoin price in a parabolic rise to the all-time high of December 2017.
The parabolic rise, which catapulted the Bitcoin price from USD 12,000 to over USD 19,500 within 34 days, came to a temporary halt just above the all-time high reached in 2017. The consequence was a two-week consolidation in the zone between USD 16,180 and USD 19,870. The former serves as a support zone after USD 18,400 (0.786 Fibonacci point 1), with the latter representing resistance in front of unrivalled territories. With the recent consolidation, the MACD and RSI indicators have been able to break away from the overbought areas and form negative divergences with respect to the price trend, which is a sign of a loss of momentum (3). Nevertheless, crossing the psychologically significant USD 20,000 zone should trigger more price fireworks.
With the price movements of the past few weeks, a foundation has been laid that creates a good prerequisite for climbing higher spheres than the 2017 highs in the medium term. In order for this undertaking to succeed, the recently overcome resistances should be respected as support in the coming weeks (green). The zone between USD 12’000 and 14’000 remains an important pillar in this regard. In addition to old resistances that now function as support, the interesting 0.618 and 0.5 Fibonacci points of this year’s trading range are also located in this area (2). Fundamental support has also formed at around USD 12,000. Serving as resistance since August 2019, the lower trendline of the channel that has been established since March 2020 (blue) is now also located within this support area. Similarly, the 200-day moving average (4) moves accentuated into this zone.
Macro: At the all-time high
In 2020, Bitcoin was able to set a higher weekly high above USD 10,000 for the first time, breaking the prevailing bearish trend since December 2017. This broke the series of lower highs that had lasted for 135 weeks.
Since the breakthrough of the bearish trend, the signs of a valid trend reversal have become stronger. With the breach through important resistance zones and a continuous trend above the 21 week average (2), the probability of reaching the all-time high created in 2017/18 increased. This was recently achieved.
Last week’s price movements created a good foundation for reaching new spheres beyond the USD 20,000 level. Corrections become more likely after accentuated price increases. Thereby, a sustainable respect for the newly created supports (green) over the next weeks/months is necessary in order to reach new highs in the coming months.