Bitcoin: USD daily Basis
Bitcoin USD – New highs since March crash
At the beginning of the reporting week the Bitcoin price tested the newly climbed 9000 USD zone. The first test to go higher was followed on Monday by a rejection to 8’500 USD. As early as Tuesday, green candles above 9’000 USD were created again. On Wednesday, the previously climbed 9’500 USD were already tested. The actual breakout from the resistance zone followed on Thursday, which brought the price, including the close of the day, to just under the USD 10,000 mark. Friday and Saturday were marked by selling pressure, causing Bitcoin to drop back to 9,500. On Sunday, there followed a sharp sell-off, which caused the price to drop to just under USD 8,000 at the low for the day. A recovery followed immediately, which brought the price back to USD 8,700 and thus had a daily bandwidth of USD 1,500, or 15%.
Advancing to well-known resistances in micro and macro trend
Bitcoin established a veritable countermovement after its price slump in mid-March. This led up to the resistance zones around USD 10,000. As suspected in the last report, this was followed by a harsh rejection, which brought the price back below the USD 9,000 mark. The countermovement since mid-March was brilliant and most recently marked by a high tempo, driven by increased speculation around the halving. An initial rejection at the USD 10,000 mark had to be expected. This was signalled not least by the RSI indicator, which had not reached the 80 mark since July 2019 (1). However, the current correction is not decisive for the positive trend since mid-March.
Interesting is the reached highest point of this micro trend. On the one hand, this is the 0.618 Fibonacci point (2) 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 functions as a confirmation of the still bearish trend of lower highs since December 2017 (see next section).
The positive structure of the micro-trend is guaranteed as long as Bitcoin can hold above the USD 7’500 – 7’700 zone. At this level, the last resistances are located which should now serve as support (green). Also, a future movement above the 200-day moving average (3) would further strengthen the positive trend. Additionally, the trendline of the respective lows of the micro-trend is located within this area. The level around 7’000 USD should serve as a last support before the positive structure suffers lasting damage. Resistance is again in the zone 9’100-9’300 USD, as well as at 10’000 USD.
Macro: Chronology of lower highs since the end of 2017
Bitcoin has so far failed to set a higher high in the weekly interval, which would have broken the prevailing bearish trend since December 2017. In its last attempt since the beginning of the year, the upward trend in the relevant zone at around USD 10,500 failed to establish itself. The countermovement that began in mid-March after the sharp price correction brings the price once again to the trend line, which was created by the lower highs since the end of 2017.
If the negative macro picture is to be broken, the tendency of lower highs since 2017 must be sustainably overcome. This can be legitimized with several weekly candles above the USD 10,000 mark. For now, a consolidation in the space below this mark should be considered more sustainable than a direct breakthrough as seen in June and July 2019 and thus turned out to be a “false breakout”. An establishment in the new area should take place in the coming weeks above the USD 7300-7500 zone, as well as above the 21-week average (1), in order not to cloud the new positive picture again.
Should a rejection below the USD 7,000 zone take place, support in the lower range of the macro trend is expected from the 200-week average (2) at USD 5,600, which has never been broken since its inception, and from the trend line (3) of the respective lows of the upward trend since March 2017.
All information in this publication is 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 for an investment in any financial instrument including crypto currencies 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 a decision.
Notice of risk
Investments and investments, especially in crypto-currencies, are generally associated with risk. The total loss of the invested capital cannot be excluded. Crypto-currencies are very volatile and can therefore be subject to extreme exchange rate fluctuations within a short period of time.
*Originally published in German at CVJ.ch