2021 – another very successful year for Bitcoin – Analysis – 4 Jan

2021 was another very successful year for Bitcoin. BTC/USD has recorded the ninth bullish yearly candlestick since inception. 

Source: buybitcoinworldwide.com

As can be seen from the yearly chart, only 2014 and 2018 posted bearish candlesticks. It is an enormous success for Bitcoin that just celebrated its 13th anniversary. On January 3rd, 2009, the Genesis Block, or the first block of Bitcoin's blockchain, was mined:

Source: Twitter

Moreover, the crypto market, in general, experienced a very successful year as well. Its total market capitalization surpassed $1 trillion at the begging of 2021 and reached $3.5 trillion in November. 

Source: CoinGecko

This way, the crypto market has become a trillion-dollar industry and cemented its importance in the global financial system. As Cardano's creator Charles Hoskinson highlighted in the summer, a trillion-dollar market cap means that crypto is here to stay; even if there are deep corrections, this market is not going to disappear and is even going to become an essential part of the global economy.

Most cryptocurrency enthusiasts also expect the new 2022 to be very prosperous for the crypto market. Nayib Bukele, the president of El Salvador, tweeted that Bitcoin will reach $100,000 this year, and two more countries will adopt BTC as legal tender:

Source: Twitter

During the first days of the new year, the market is experiencing a small decline. According to Coin360.com, one BTC costs €41,022.22 (-1.34%), one ETH – €3,336.80 (-1.11%), one DOGE – €0.1475 (-1.69%), and one UNI – €16.05 (-2.73%): 

Source: Coin360.com (Daily crypto market performance)

Now, let us look at the price charts of the top cryptocurrencies against the euro in the most noteworthy time frames.

BTC/EUR

In the monthly time frame (MN), in December, BTC/EUR formed a bearish candlestick with a local high and a local low below the previous ones:

The lower highs and lower lows confirm that the bears still control the market.

However, in the weekly time frame (1W), there is neither a clear bearish signal nor a bullish one. BTC/EUR has formed a Sandwich (sequence of mid-size bullish and bearish candlesticks at the same level):

The Sandwich candlestick formation is a clear signal of a consolidation attempt on the market.

The daily time frame (1D) hints at potential consolidation as well. The price of Bitcoin, supported by the 360-day Moving Average (MA 360), stopped declining and has started to consolidate:

Nevertheless, we would like to underline that BTC/EUR is still below the 30-day Moving Average (MA 30) and the 90-day Moving Average (MA 90). That's why the bulls should be very cautious.

The 1-hour time frame (1H) brings a bit of positivity for the market participants. BTC/EUR has exited the Descending channel (downtrend):

The exit from the channel is a small positive signal indicating that the bearish pressure is diminishing. Nevertheless, it is too early to talk about uptrend renewal. That's why we still prefer to stay away from the market.

ETH/EUR

In the monthly time frame (MN), ETH/EUR formed a Bearish Engulfing in December:

According to the Technical Analysis theory, this is a potential trend reversal signal that usually occurs at the top of an uptrend. However, if we look at the monthly linear chart of ETH/EUR, we can see that if the price forms a local low at the current level, then this local low will be still above the previous one:

In our view, the sequence of higher lows and higher highs confirms that the uptrend remains in place.

Let us remind you once again that, in the weekly time frame (1W), we've been following the Cup and Handle (C&H) formation (typical bullish pattern):

So, if the price rebounds from the upper line of the C&H and surpasses the last local high, then a buy signal will occur. In this case, we will probably open a small long position.

DOGE/EUR

In the monthly time frame (MN), in December, DOGE/EUR formed a bearish candlestick that tried to exit the consolidation range in the downward direction:

In our view, this is a clear signal that the bulls are still weaker than the bears, and the buying pressure necessary to resume the uptrend is still absent.

Moreover, we would like to remind you that, in the daily time frame (1D), the price of Dogecoin has dropped below the three key Moving Averages (MAs), namely, the 30-day Moving Average (MA 30), the 90-day Moving Average (MA 90), and the 360-day Moving Average (MA 360): 

Because of these bearish candlestick formations and technical patterns in the noteworthy time frames, we prefer to stay away from the market until the situation improves.

UNI/EUR

In the daily time frame (1D), the bears continue to put pressure on the price of Uniswap – UNI/EUR is still below the 360-day Moving Average (MA 360) and the 90-day Moving Average (MA 90):

However, as can be seen from the chart, the price has just surpassed the 30-day Moving Average (MA 30). We view this as a small initial positive signal indicating that the bulls are starting to support the price at the current levels.

Moreover, in the 4-hour time frame (4H), UNI/EUR has formed a Descending Triangle:

This triangle is a typical trend continuation pattern. As can be seen from the chart, the price is already in the final part of the triangle. That's why it is highly probable that UNI/EUR will exit the triangle in the upward direction and will try to resume the uptrend. Nevertheless, we will enter the market only if the price manages to exit the triangle upwards.

Become part of the future! Buy Bitcoin on xChange.bg in three easy steps! You can also trade Ethereum, Litecoin, Bitcoin Cash, USDT, USDC, LINK, Dogecoin, and UNI. Download our app for Android and iOS.

The analysis is purely informational and does not constitute investment, financial, trading, or any other sort of advice and you should not treat any of Global xChange LTD.'s content as such. Global xChange LTD does not recommend that any cryptocurrency should be bought, sold, or held by you. You are solely responsible to conduct your own due diligence and consult an advisor before making any investment decisions.