Bitcoin USD daily basis
Bitcoin USD – consolidation above 11’000 USD
The reporting week was characterized by a downward trend. The beginning of the week was quiet on Monday, with a narrow trading range above the USD 11,500 mark. Tuesday was then characterized by stronger selling pressure, which pushed the price close to the USD 11,000 zone at the low for the day. The next three trading days averaged around 11’400 USD, with a range of a good 300 USD. The price never fell below the 11,000 USD zone. On the weekend, a more friendly trend was already developing again, with a renewed establishment above the 11,500 USD zone.
Breakthrough through historical resistance
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, the 0.618 Fibonacci point (1) 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 $10,000 also 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).
As expected in the last report, a correction took place close to the initial support of USD 11,000. The break of the lower trendline of the last formed rising wedge forced the price drop on Tuesday and brought Bitcoin back to the next support (green). It remains to be observed whether the low was already marked by this. Thus, the USD 11’000 serves as a first test of how the last seen bullish momentum stands.
An establishment above the historical resistance at 10’500 USD is still an important pillar of the positive trend. The daily RSI and MACD indicators have cooled down (2), which speaks for sustainability.
The next resistance to be overcome just above USD 12’000 is significant. Should this be permanently overcome, there is little resistance left until the all-time high of December 2017 and the probability of a sustainable trend reversal would be high (see next section).
Macro: Series of lower highs since end of 2017 broken
Bitcoin was able to set a higher high for the first time in the weekly interval, breaking the prevailing bearish trend since December 2017. The series of lower highs, which lasted for 135 weeks, was thus interrupted (marker).
In order to change the negative macro picture into a valid trend reversal, the breakout should be legitimized by several weekly candles above the USD 10’000 mark.
An establishment above USD 10’000 and a consistent overcoming of the resistance around USD 12’000 over the next weeks speak for a legitimacy of the trend reversal. If the Bitcoin exchange rate can then consolidate above USD 12,000 again, the chances of an attack on the all-time high of a good USD 20,000 would certainly exist.
A drop in the price, which would bring the price back into the USD 9,500 range and below over several weeks, would damage the positive momentum and argue for a longer consolidation.
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Note on 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 exposed to extreme exchange rate fluctuations in a short time.