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As we head into May, the price of Bitcoin has shown impressive resilience even in the face of the recent and troubling Bitfinex/Tether news. While there was a dip last week when the information first came out, the price of Bitcoin has held above $5,000 and has continued to hold a rising line of support. If this continues, it should just be a matter of time before we test $5,500 and if we can get above there, $6,000 should be next.
Highlights:
- Despite last week's Bitfinex news, Bitcoin managed to stay inside the ascending wedge that has been forming since April 1st.
- Recently held above the bottom of the wedge, looking to retest $5,500 as we head into May.
- Technicals point to a break up or down coming during the next month.
- Daily indicators are largely bullish, but we do still have the 50 week MA to watch out for.
Beginning on the 4 hour, we can see that the price has held nicely above the bottom of the ascending wedge that is forming just below about $5,500. The 50 MA has provided some resistance in our attempt to get back up, but with the 200 MA coming up from below support, it is likely only a matter of time before we test back to the top of the channel.
BTC/USD Chart provided by Tradingview
Moving out to the daily, it becomes more clear how this pattern will almost certainly have to break before the end of May. We can see the 50 day MA coming up which could help provide upward pressure. That being said, we could still be consolidating here for much of the month.
BTC/USD Chart provided by Tradingview
Lastly, as we look to the weekly, we can see there is still the issue of that pesky 50 week MA, which was tested on once but rejected. Until we get firmly above that line, the road to $6K is not yet clear, however this too should resolve before the end of May.
BTC/USD Chart provided by Tradingview
Bull Scenario:
If Bitcoin is able to hold within this channel, then it should be only a matter of time before we test back to $5,500 and push through. Then getting to $6,000 should be easy, and hopefully we can get above enough to at least establish support at that level.
Bear Scenario: If we fail to get above $5,500, then before the end of May we will likely be pushed out of the bottom of this wedge and that could send the price tumbling. If we break, then the price could fall as low as to levels from before April 1st, probably near $4,100.
At this time, most of the technicals on the shorter timeframes are looking rather bullish, but it won't be until we get to the other end of May that we can be sure about how this will all shake out. Stick right here with Chepicap for any and all updates!
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