Bitcoin/USD daily basis
Bitcoin/USD – Tentative steps over USD 10’000 mark
Bitcoin was again able to gain ground this reporting week. After a consolidation above the USD 9,000 mark, a rally to the USD 9,700 mark occurred on Wednesday. This marked a new daily high over the previous days and was the basis for the resulting green candlesticks over the past couple days. By Saturday, the price moved within daily ranges near the psychological mark of USD 10,000 — on Sunday, the psychological barrier was broken. Since then, we have seen a consolidation just above the USD 10,000 mark.
First test of the strong resistance zone(Source: Tradingview.com)
We are now entering a zone which has been strongly influenced by earlier price movements. Between June and September 2019, the zone has repeatedly served as a support for prices above the USD 10,000 mark; before the support was breached in a bear-run at the end of September. This zone has also served as resistance during the massive two-day rally at the end of October. Now, another, more sustained test than the one experienced in October is set to follow. Thus, an initial rejection of further price increases would not harm the current market structure, as long as the trend of higher lows and highs is not broken.
If one takes a Fibonacci calculation from the high reached in June to the low point of the downward movement in December 2019, we have now reached exactly the middle (1). The golden 0.618 Fibonacci point is at just under USD 11,000. Interestingly, this zone is the upper part of the seemingly very strong resistance zone that prevails above USD 10,000. Resistance is thus numerous from 10’500 USD to 11’000 USD. Support at 9’500 USD was generated by last week’s consolidation (green). There, the trendline is also located which is accentuated from January 2020 onwards (2).
Macro: Signs of a trend reversal are intensifying
The series of lower highs and lows that has been prevalent since June 2019 was interrupted. For the time being, a higher high above the trend-defining candle of October 2019 is missing (arrow). A week-end close above the 10,500 zone would remedy this shortcoming (arrow) and help to improve the overall picture.
In the meantime, a number of hurdles have been overcome which are in favour of the sustainability of the latest uptrend: 1. we are above the 21-week average line (1). 2. the weekly MACD indicator has recently crossed and changed to positive (2). The weekly RSI also has room to move to overbought zones around 70 (3). The now following resistance zones (red) formed by already tested and failed breakout attempts in 2018, as well as the long period between July and September 2019 which serves as support, is strong.
Here, the credibility of the most recent upward-movement will have to prove itself in the coming weeks. A confirmation of a trend reversal since June 2019 is still pending. An initial failure at the resistance zones above USD 10,500 would not be detrimental to the recent structure, as long as the trend of higher lows and highs can continue. Currently, USD 9,500 from the previous week’s high and USD 9,000 from the low of the current candle serve as support.
A breach of the resistance zones between USD 10,500 and USD 11,000 over the next few weeks would validate a sustained break in the prevailing downtrend and could herald another bull phase lasting several months.
Disclaimer
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.
Risk note
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
