Bitcoin/USD daily basis
(Source: Tradingview.com) Bitcoin/USD – for the time being, consolidation below newly created highs taking place
The price of bitcoin has moved away from its recent highs of USD 10,500 in the reporting week. From Sunday onwards, the price traded downwards with lower highs and lows. With partly high daily bandwidths, the price consolidated around 9,800 USD by mid-week. On Wednesday, a weekly low of 9,200 was marked, testing the newly created support of the previous week. In the days that followed, the price was able to hold its ground above this support zone and, as a logical consequence, moved back towards the USD 10,000 mark in the second half of the week with higher daily lows occurring.
The wheat separates from the chaff between USD 10,500 and 11,000
We are now entering a zone which is strongly influenced by earlier price movements (red). Between June and September 2019, the zone above USD 10,000 served as a support on several occasions before breaking through downwards at the end of September. It also served as resistance during the massive two-day rally at the end of October (1). So now follows another, more sustained test than in October. A first rejection took place the week before last. A consolidation above the support zone between 9,200 and 9,300 is to be seen positively and should soon lead to a new attack on the most recent, newly created highs around USD 10,400 – 10,500.
Resistances are still numerous from 10’500 USD to 11’000 USD (red). They have been confirmed by the recently reached highs. If one takes a Fibonacci calculation from the high reached in June to the low of the downward movement in December 2019, the golden 0.618 Fibonacci point is at just under 11,000 USD (2). A break through this level and a subsequent consolidation above the new highs at USD 10,500 should be fundamental for a new bullish cycle, which could consequently lead to the old highs of around USD 20,000.
Macro: Trend reversal since June 2019 is imminent
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). Last week’s attempt failed. A future close of the week above the 10,500 zone would remedy this shortcoming and help to improve the overall picture.
In the meantime, several hurdles have been overcome which speak in favour of the sustainability of the latest uptrend: 1. we are establishing ourselves 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 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, are 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. A first failure of the resistance zones above USD 10,500 has occurred. As long as the price remains above the 21-week average line, this should continue to be seen as positive and not per se detrimental to the latest structure. Currently, the zone between 9’200 – 9’500 USD, as well as 8’500 USD due to previous price movements serve as support.
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 always 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
