Bitcoin (BTC) Price Prediction: BTC May Reverse Its Trend This Week

Bitcoin price is trading in the lower portion of an ascending parallel channel on the monthly chart, which is a corrective pattern.output: Key Takeaways

Bitcoin price fell 32% after hitting new all-time highs in January before reversing its trend in April, bouncing back more than half of its losses.

The first week of May started with a decline as Bitcoin pulled back after hitting a significant confluence of resistance levels.

Today, all eyes are on the Bitcoin price to see if the rally will continue this month or if the downward trend will continue.

Bitcoin’s April Close

Bitcoin formed a bullish candlestick in April (green) after breaking its pattern of successive bearish monthly candlesticks (red).

The cryptocurrency rose from $82,540 to $94,181, recovering some of its previous losses.

However, despite the increase, Bitcoin failed to close above the midline of January’s bearish engulfing candlestick, which started the downward movement.

The failure to do so puts the trend reversal in a bad light, suggesting the bounce could be a bear market rally, especially if Bitcoin does not follow through in May.

Also, BTC is trading in the lower portion of an ascending parallel channel, which is a corrective pattern.

What’s more, the Relative Strength Index (RSI) generated bearish divergence (orange) and is below 70.

While the Moving Average Convergence/Divergence (MACD) is positive, it also shows weakening momentum, which might lead to a breakdown.

If that happens, the closest long-term support will be at $60,000.

Therefore, despite the significant bounce, the monthly time frame gives a slightly bearish Bitcoin price prediction.

Critical Resistance for BTC

The weekly time frame analysis shows Bitcoin is in a very precarious position.

Following its increase, BTC reached a confluence of resistances between $94,000-$96,000, which is a significant build-up of resistance.

The first resistance level is Fib 1.272 of the last wave, which is a technical indicator used to identify potential price movements.

The second resistance is Fib 0.382 of the 2023 high, which is another technical indicator used to measure price trends over time.

Finally, the price reached the upper boundary of an ascending parallel channel, which is a chart pattern that suggests the price is moving in a specific direction.

While BTC briefly moved above two resistances (red), it failed to sustain the increase and formed a long upper wick.

Thus, the current weekly close is crucial for Bitcoin’s trend.

A decisive close below $94,000 could lead to a significant retracement, while the opposite is true with a close above $96,000.

Technical indicators are also at critical levels. The RSI is slightly above 50, while the MACD is nearing a bullish cross.

This week’s movement can help determine if the long-term Bitcoin trend is bullish or bearish.

What’s Next for Bitcoin in May?

Finally, Bitcoin’s daily time frame gives a bearish outlook.

The wave count shows a completed A-B-C structure (green) in which waves A and C are of equal length.

The price action shows a breakdown from an ascending parallel channel.

Finally, the RSI and MACD generated bearish divergences, which usually precede bearish trend reversals.

It is worth mentioning that since the rally began, this is the first time the RSI and MACD fell below 50 and 0, respectively (black circle).

Therefore, a continued BTC decline this week will favor the bearish count, leading to a considerable correction.

Bitcoin price is trading in the lower portion of an ascending parallel channel on the monthly chart, which is a corrective pattern.