BTC has had an extraordinary month. Currently sat at ATHs, everyone in the industry is wondering when the BTC rocket ship will run out of fuel. However, one week ago BTC was beginning to look somewhat unstable.
BTC broke below a symmetrical triangle, rejecting a first time break above $20,000 USD. The break below (as indicated with green circle) saw BTC fall 7.5%, all the way to $17,000 USD. From here BTC bounced off $17,000 USD, breaking back towards $20,000 USD with a positive trend. This bounce from $17,000 USD cemented BTCs intention to break above $20,000 USD, with the bulls firmly regaining control.
From point 2 – 3 BTC increased from $17,200 USD to $19,800 USD. Once BTC had broken ATHs, the cryptocurrency soared. BTC has increased 24% over the past 24 hours.
BTC/USD – movement stages
BTC Broadening channel
On the daily chart we can see that there is a broadening channel. This channel consists of an underlying support line alongside an overhead resistance line. In this channel the two lines are diverging away from each other. Currently for BTC, this formation is bearish. The formation is bearish due to BTC being in close proximity to the overhead resistance.
BTC/USD broadening formation
What are the current support / resistance levels?
Now that BTC is at ATHs, there are now no historical resistance levels. Therefore likely resistance levels are found through using two types of technical analysis tools. The first is the trend-based Fibonacci extension.
If you want to find out more about how to trade using Fibonacci tools, click here.
The trend based Fib drawn below was created using BTC price data from November 2018 – March 2020. Firstly, there was the move from $3000 USD – $14000 USD which creates the upwards trend. Then the move from $14000 USD – $3800 USD comprised the downwards trend completing the drawing.
As shown below, the trend based Fib has been closely followed this year. BTC finding substantial amounts of support/resistance between the 0.236 – 0.786 levels. This can be seen in the chart below with the green boxes.
Once BTC had surpassed the 1.0 level, BTC rejected to find support at this level – instead rising swiftly to the 1.618 level ($20,000 USD). BTC ploughed through the resistance levels with ease, however, it did find substantial resistance at 1.618. If BTC retraced from its current position, support will likely be found at this level.
According to the trend based Fib, the next resistance level is at the 2.618 level ($30,000 USD). There is a possibility that BTC could go parabolic from here hitting $30,000 USD, however, there are potential resistance levels before $30,000 USD.
BTC/USD – trend based Fib extension
BTC Pivot Points (PPs)
Like trend based Fibonacci extensions, PPs are a great way of finding resistance levels when a cryptocurrency is at ATHs. An example of this can be seen with the CEL intelligence report.
If you want to find out more about using Pivot Points click here.
In the table below are the current PPs. Currently BTC is between the R1/R2 levels.
|Pivot Point||BTC Price USD||Resistance||Support|
How the chart below was created:
- Small resistance level is the R2 PP.
- Resistance zone is a combination of psychological $30000 USD barrier and the R3 PP.
- Utmost resistance zone is a combination of the 2.618 trend based Fib and the R4 PP.
BTC/USD resistance levels
Resistance levels conclusion
Below is a bullish scenario, which when compiled with the indicators appears the most likely direction for BTC. BTC will find resistance at $24000 USD, however this resistance level is weak and will likely be broken above.
If the $24000 USD level is not broken above, BTC will reject the R2 level and potentially touch the support line of the broadening formation.
Although if the R2 level is broken above, then BTC will flip the overhead resistance into a support line. This will put an end to the broadening formation. From here BTC will likely hit $30000 USD, with heavy resistance found at this level.
BTC/USD – bullish projection
|BBs||X||BTC currently in the upper deviation of the BBs following a breakout, therefore bullish.|
|Gann HL||X||The Gann HL continues to be underneath the daily candles, again bullish.|
|SAR||X||Underneath BTC, bullish.|
|EFI||X||The EFI has seen a sudden spike, traders should be cautious. The spike currently being seen is the largest since 2019. What goes up must come down.|
|MACD||X||Has just seen a positive crossover in a neutral area, therefore bullish.|
|QQE MT4||X||Like the MACD the QQE MT4 has seen a positive crossover, bullish.|
|RSI||X||Currently in the high 80s meaning very overbought. This does not mean bearish.
BTC had an RSI < 80 during BTCs rise from $12000 USD – $20000 USD.
Although with BTC having risen 23% in two days, with a current RSI of 88 – the risk levels are high currently for BTC.
|WWV||X||WWV has switched from red to green, bullish.|
|Volatility||X||With the recent BTC spike volatility has majorly increased. Expect to see volatility increase further in. the coming days.|
BTC indicators table
BTC indicators conclusion
In conclusion, the BTC indicators are currently bullish with no indicators currently bearish. However some indicators are urging caution. This is due to the rapid rate at which BTC has risen in value over the past 48 hours.
Overall, BTC is currently looking bullish, with a likely rise towards $24000 USD. BTCs direction from here will depend on BTCs ability to break $24000 USD. If BTC breaks above, then the next target is $30000 USD. On the contrary if BTC fails to break above $24000 USD, the pullback will see BTC fall towards the $22000 USD support level.
On the whole ZRX has had a good year, with the cryptocurrency currently up 124% over the course of the year. The year so far for ZRX has not been plain sailing though, with ZRX moving in two major moves. The first was an extremely impressive move from $0.118 USD to $0.982 USD, an increase of >750%. From here ZRX has had an unimpressive time, seeing the cryptocurrency lose 52% of its value between August and November.
ZRX has had a poor couple of months. This can be seen again in the chart below. From 21/08/20 – 17/12/20 ZRX has fallen 52%. During the same time period BTC has increased its value by 98%.
ZRX/USD vs BTC/USD
The reason for this poor performance is due to ZRX being stuck in a wide trading range. This range is between the 0.786 – 0.618 Fibonacci retracement levels (Fibonacci retracement originating from the yearly high of $0.9 USD).
As seen below ZRX had a positive breakout from the trend line below – indicated with the green circle. From here ZRX has proceeded to move between the 0.786 – 0.618 with little signs during this period of a breakout. This is due to the inability the cryptocurrency is having to break above the 0.618 level.
ZRX/USD – Fibonacci
ZRX – Other DeFi coins comparison
Performance of cryptocurrency since 01/12/2020:
- CRV +6.2%
- COMP +50.5%
- CEL +13.0%
- BAL +0.67%
- YFI +14.81%
- ZRX +1.29%
ZRX/USD – comparison to other altcoins
As shown above, ZRX has performed poorly in comparison to other DeFi coins. This continued poor performance seems set to end, with the indicators for ZRX looking bullish. Highlighted in the table below, we can see numerous indicator similarities now when compared to back in August.
|Gann HL||X||Gann HL||X||In both time periods, the Gann HL has flipped from bearish to bullish after a small downwards trend.|
|SAR||X||SAR||X||The SAR in both time periods look very similar, at a similar price. Also the SAR is a similar length. The two periods are highlighted in a green circle.|
|BBs||N/A||N/A||BBs||N/A||N/A||In both time periods, a bollinger band squeeze can be seen. This typically leads to a substantial move in either direction.|
|MACD||X||MACD||X||The final similarity which will be mentioned is the MACD. They are both bullish, with crossovers occurring in the same area of the MACD.|
ZRX Indicators / conclusion
In conclusion, the indicators and charts suggest that ZRX could attempt to push above the 0.618 Fibonacci level again. As seen in cryptocurrency history, interest between altcoins and BTC switches. The interest is currently not with ZRX. Currently, all of the focus is currently on BTC and XRP. This is due to BTC having reached ATHs and the XRP Flare Network airdrop.
Written by, Oliver Page on behalf of AAX.