Bitcoin (BTC) has witnessed the roller coaster journey of 2021. Although BTC has retreated from its historical high of $69,000, the digital asset has risen by 60% so far this year. During the same period, gold fell more than 5%.
With inflation in the United States and several other regions of the world soaring, Bitcoin’s performance over gold suggests that investors may think it can better hedge against inflation compared to gold.
During the year, the total market value of cryptocurrencies soared to about 3 trillion U.S. dollars, but Bitcoin’s dominance dropped from about 70% at the beginning of the year to 40%. This shows that several altcoins far outperform Bitcoin.
BTC Week K
Bitcoin (BTC) broke through and closed above the upper resistance level of 64,854 in early November, but the long wick on the candlestick shows that profit bookings are at a higher level. Selling continued in the following week, and the price fell below $64,854.
The bulls tried to defend the 20-week exponential moving average (EMA) ($51,999) but failed to sustain the rebound. This intensified the selling and pulled the price below the 50-week simple moving average (SMA) ($47,681).
The bulls bought on dips, but failed to extend the rebound above the 20-week moving average. This suggests that sentiment may shift from buying on dips to selling on rallies. The bears once again tried to pull the price down and maintain it below the 50-week moving average.
If they succeed, the BTC/USDT pair may fall to the strong support level of $39,600. The 20-week moving average began to fall, and the Relative Strength Index (RSI) fell below 50, indicating that bears have the upper hand.
A break and close below US$39,600 may cause a deeper correction to US$28,805. Such a sharp decline may delay the start of the next uptrend.
On the other hand, if the bulls successfully hold the 100-week moving average, the currency pair will try to rise above the 20-week moving average again. If this happens, the currency pair will try to rebound to the upper zone of $64,854 to $69,000.
Breaking and closing above the area may start the next segment of the uptrend, which may push the currency pair to the psychologically critical level of $100,000.