Bitcoin/USD – New highs since March crash
Right at the beginning of the reporting week, Bitcoin tested the lower end of the previously scaled territory above USD 8,000. After the first sharp drop in the price on Sunday of just under USD 1,500, which took the price to USD 8,100 at the low for the day, this zone was tested again on Monday. Again with a high daily range of almost 1’000 USD, Bitcoin moved between 8’200 and 9’200 USD, with the daily closing price at 8’500 USD. The 8,000 mark proved to be a good support and in the following three days green candles were placed with higher daily lows and highs, which brought Bitcoin close to the highs of the previous week. At the end of the week, the price found its respective daily high at 9,700, while over USD 9,200 formed a bottom.
Advancing to well-known resistances in the 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. This was followed by an initial rejection, which brought the price back to the 200-day average (1), just over USD 8,000. In the meantime, a consolidation in the area above the USD 9,200 mark, which is currently serving as a floor, is taking place. The bulls are making another attempt to test the relevant resistance above USD 10,000. The possibility of another failure cannot be ruled out. If a breakthrough is already achieved in the next few days, a corresponding consolidation above the powerful resistance zone will be necessary to continue the bull run.
The resistance zone around USD 10,000 is interesting in several respects. On the one hand, the 0.618 Fibonacci point (2) of the entire downward movement, which was heralded at the end of June 2019 just below USD 14,000, is located here. 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).
Support is in the range below USD 9,000, and at USD 8,200. The positive structure of the micro-trend is guaranteed as long as Bitcoin can hold above the zone 7’500 – 7’700 USD (green). Currently, a movement above the 200-day average (3) also strengthens the positive trend. In addition, the trend line of the respective lowest prices of the micro-trend is located in this area. The level around 7’000 USD should serve as a last support before the positive structure suffers lasting damage.
Macro: On the threshold of a trend reversal
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 is the result of 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 in order to rule out false outbreaks such as those in July 2019. An establishment in the new range 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.
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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