52 wk range
$ 12.752,65 -
$ 66.930, 39
Bitcoin had a very active 2021 so far which has made it the cryptocurrency of the most discussed and analysed financial instruments: in 2020, Bitcoin gained + 300%, going from $ 7,000 to almost $ 30,000.
In 2021, to date, the reference cryptocurrency has had a performance of + 120%, going from $ 30,000 to the most recent $ 62,000.
Analyzing the 2021 price action, we see that $ 30,000 is a strong support level, respected both at the beginning and in the middle of the year.
The fluctuations between May and June led to the formation of a descending triangle which instead broke upwards, generating the strong upward momentum of the last period.
The upward break of a bearish formation is explained by the fact that the primary trend is bullish: consequently, continuation patterns (such as triangles) are unlikely to lead to bearish breaks.
In October we saw a "back-test" of the support (first resistance) at $ 40,000 before returning to all-time highs.
At the moment well above 0 reflects the positive moment of the cryptocurrency but it is now on an area that has led to bearish swings in the past: mid-January and mid-February 2021 saw MACD at the same levels, followed by periods of sale between the 20% - 30%.
As a result, given previous moves, we might expect short-term momentum to decline.
After the latest upward moves, the indicator has reached the overbought zone.
If we look at the RSI trend during 2021 we realise that the topping of high levels of RSI was followed by bearish swings that led the Bitcoin to get closer to the 50-day average: as with the MACD, periods of selloff that have seen a retracement between 20% -30%.
Positive indications given by the RSI is the higher lows recorded between 20 July 2021 and 21 September 2021: the positive divergence between RSI and price confirms the upward trend.
POSSIBLE BULLISCH SCENARIOS
With the breaking of the descending triangle in July 2021, Bitcoin has gone to form a fairly upward bullish channel: the upper part of the channel sees numerous confirmation points while the lower part much less leaving it therefore more a hypothesis rather than a confirmed figure.
A possible scenario could see a retracement to $ 46.500- $ 48.500 and then continue to the upside.
In this case, the RSI could drop to 40-30 levels to then sustain further bullish momentum.
Likewise, a decline would allow MACD averages to stabilize at less extended levels but still remaining above 0.
A descent to the bottom of the channel would result in a decline of 25% in line with the retracement percentages of the year.
By respecting the bullish channel, Bitcoin could then reach a new high around $ 75,000 - $ 80,000.
A second scenario is that of a parallel channel between $ 30,000 and $ 65,000
In this case, to identify strong support areas, we take into account the volume profile: it is graphically understandable that the maximum concentration is at $ 35,000 with the areas of $ 50,000 - $ 46,000 and $ 41,000 - $ 37,000 as important areas of accumulation.
Through the analysis of volumes it is also better understood how Bitcoin tends to move much faster in those areas with less volumes.
By combining the oscillation within the parallel channel, together with the RSI - MACD indicators, and the analysis of volumes, we confirm that the $ 47,000 and $ 41,000 can be areas of bullish reversals in the event of a retracement.
To understand how best to enter any long positions, we will then analyze the fluctuations that the cryptocurrency will have in the areas highlighted above.
Following a bullish break of the parallel channel, Bitcoin could then reach a new high around $ 75,000 - $ 80,000.
We conclude the article by confirming that the primary trend of Bitcoin is bullish.
Taking a longer-term analysis, we could think of 2021 as a long phase of accumulation and then continue to rise.
However, a long-term analysis must, in our opinion, also include more fundamental matters other than pure price fluctuations.
We focus our analysis on the short to medium term.
In the short to medium term, we expect a slight retracement followed by strong upside swings that could lead to a sharp break of the $ 65,000 ceiling.
To date, we estimate an optimal retracement between $ 41,000 and $ 47,000
OTB Global Investments
22 October 2021