KuCoin Weekly Technical Overview: Bitcoin Closes Bearish for the Week as Profit-Taking Comes in Strong

2021/10/25 10:28:54

It is indeed the beginning of a new era for the Bitcoin market as the prices have surpassed their previously set all-time highs. Despite its continuous criticism over several official bodies, investors’ belief has kept the prices heading higher and higher.

Although the sentiment took a hit towards fear in May 2021 due to the crypto crackdown imposed by China, the rollover in prices around $30,000 levels reclaimed the bullish sentiment in Bitcoin as well as altcoins.

Relative to Ethereum, Bitcoin certainly seems to have taken charge as the buyers of it breached above the ATH much before Ethereum. In fact, Ethereum also created a new all-time high (ATH) of $4,361 on Oct 18, a slight increase of its previous record.

Bitcoin Price Update

The first trillion-dollar cryptocurrency has been through a roller-coaster with respect to its prices YTD. Especially after Bitcoin breached above $40,000 in the first quarter, the entire price action has been between $30,000 and $60,000.

Fast forward to the present date, the Bitcoin market trades at the highs of around $65,000 after five months or so. Although the price of BTC has surged to its highest-ever point, the market has not evidently broken through above its all-time highs.

After retracing between $60,000 and $63,000 for over a couple of days, the buyers made an effort to breach through the all-time high of $64,840. In reality, the market did surpass the high but took resistance at $66,985, only about 3% higher than the previous high. Optimistically, BTC did officially make a new all-time high, but that does not put the market in extreme bullishness as the bulls failed to ride the prices higher. However, it is too early to comment on the buyers giving up their throne already.

Did the Bitcoin ETF Hype Drive the BTC Spot Market to All-Time Highs?

After years of waiting from the SEC for approval of crypto-based exchange-traded funds, the first Bitcoin ETF is finally listed on the US stock exchange. Although it was a BTC Futures-based ETF, the demand was extremely high. And analysts believe that the ETF had a pivotal role in Bitcoin reaching the all-time highs. On the bigger picture, it does make sense, but JP Morgan, a leading global investment bank, has another insight towards BTC’s bullish price action.

Last week, JPMorgan Chase's analysts, headed by Nikolaos Panigirtzoglou, issued an analysis letter detailing that inflation, not the euphoria surrounding the first US Bitcoin futures ETF, has been increasing the price of Bitcoin to its ATHs.

Bitcoin Heading Back to Weekly Support Level?

As mentioned earlier, Bitcoin prices have been on a roller-coaster ride ever since the prices have entered 2021. Be it due to the altcoins getting into the bull run or the countries’ governments going against BTC, the prices have been unable to breach their highs set in May. However, from a technical perspective, the trend still remained in the hands of the buyers.

Speaking of the price action, the prices came in for a massive discount in the second quarter of 2021, allowing buyers to accumulate around $30,000. As this price previously stood as a powerful demand zone, the market was expected to hold in reverse yet again. And out of no surprise, the prices did hold firmly at the $30,000 support level, which turned out to be a bottom, in hindsight.

That being said, the consolidation between $30,000 and $40,000 was rather interesting for the price action the buyers and sellers presented in their areas of interest. Despite three attempts by the sellers to breach below the support levels, the buyers consumed it as their best price to accumulate. As a result of the overextended consolidation (accumulation), the price took charge to break through its nearest resistance levels.

The move from $30,000 to $50,000 became the first impulsive push of the bulls. Coming with high intensity, this push was indeed a confirmation of the buyers stepping up. Yet this move did not satisfy the condition of a higher low that is necessary for a trend.

As the market took resistance at $50,000, it was on the anticipation of a higher low. With the sellers plummeting the prices lower week by week, the buyers shot up strongly at newly formed $40,000 support, which even breached the $50k resistance level. Also, this gave rise to the much anticipated higher low.

With all hurdles surpassed, it was time for the bulls to head at least up to the final resistance at $58,000 or the ATH. The buyers smoothly kept inching higher and higher to make it to the ATH in the next couple of weeks. Finally, a new ATH was set on October 20.

Bitcoin Price Chart on the Weekly Timeframe | Source: BTC/USDT

But the market reversed right back down after setting its high. With the week coming to an end, the sellers evidently were in control of the market. However, given that the impulsive pushes are gaining momentum, the dips in the market are certainly retracements of an uptrend for the buyers to resume their move. It is about the momentum of the sellers on the way down that would determine if the pullback would take support at $58,000 or $50,000.

Stay tuned and watch the KuCoin Blog for more interesting educational crypto content. All the best!

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