Bitcoin price analysis for May 12-17: crypto likely to remain range-bound with positive bias
Traders can take intraday trades to benefit from the volatility surrounding the Bitcoin halving
Bitcoin’s halving completed without any major drama in Bitcoin’s price action. This was to be expected as the halving had been priced in. However, this does not mean that halving was a non-event because the miner rewards have been cut in half from 12.5 coins to 6.25 coins. This will reduce the new supply into the markets, which is likely to be bullish in the long-term considering the increasing interest from institutional traders and record money printing by central banks.
The short-term performance of 0'>Bitcoin following the event has been mixed. One month after the first halving in 2012, Bitcoin rallied 7 per cent, whereas, a month after the second halving in 2016, Bitcoin lost 10 per cent. This suggests that Bitcoin is likely to be volatile in a range for the next few days but the long-term picture is unmistakably positive.
From late 2012 to 2014, Bitcoin gained about 10,000 per cent while from mid-2016 to end-2017, Bitcoin rallied 2500 per cent. Therefore, investors should use the weakness in the next few days to build positions for the long-term. For the short-term traders, let’s do the Bitcoin price trend analysis to find the critical levels to watch out for.
Bitcoin price technical analysis: weekly chart
Last week Bitcoin rallied to $10,0085.05, which is just below the downtrend line of the symmetrical triangle. As expected, the bears defended this level aggressively. Due to this, the weekly close (UTC time) was in the red for the first time after seven weeks.
However, the failure of the bears to close near the weekly lows shows buying on dips. The 20-week EMA is sloping up and the RSI has maintained in the positive territory, which suggests that bulls have a slight edge.
If the 0'>BTC to USD pair bounces off the 20-week EMA, the bulls will make one more attempt to scale the price above the downtrend line. If successful, a new uptrend is likely. Even if the pair consolidates just below the downtrend line, it will be a positive sign and will increase the possibility of a breakout.
This bullish view will be invalidated if the bears sink the pair below the 20-week EMA. In such a case, a drop to $6,400 and below it to the support line of the triangle is possible.
The Bitcoin price analysis of the weekly chart suggests a tough fight between the bulls and the bears in the next few days. Let’s analyse the daily chart to do the Bitcoin price weekly analysis for May 12-17.
Bitcoin price technical analysis: daily chart
Although Bitcoin rallied sharply on May 7 and hit the critical psychological level of $10,000 (£8,000, €9,200), the bulls could not build upon this move. This shows hesitation among the bulls to buy at higher levels.
The failure to sustain above $10,000 attracted profit booking by the short-term traders. After a minor correction on May 8 and 9, the 0'>BTC to USD pair plunged on May 10. This could have been due to a large seller offloading his positions, which in turn triggered several stop losses and had a cascading effect.
However, the recovery from the intraday lows on May 10 and 11 is a sign that bulls are buying the dips to the uptrend line. Currently, the bulls are attempting to keep the price above the 20-day EMA. If this level holds, the bulls will again try to carry the pair to $10,000 where they are likely to face stiff resistance from the bears.
Therefore, the pair might remain range-bound between $8,000-$10,000 for the next few days. The Bitcoin price trend analysis of the daily chart indicates a slight edge to the bulls but does not point to a rally yet. It signals the possibility of a range-bound action for the next few days.
How to trade Bitcoin this week
Bitcoin’s halving has just completed. Usually, after such an important event both the bulls and the bears try to assert their supremacy. Therefore, the volatility is likely to remain high for the next few days and intraday traders can benefit from the large swings.
However, the risk can be high for the positional traders; hence, they can wait on the sidelines until a new trending move begins.
FURTHER READING: Bitcoin explained simply: everything you need to know
FURTHER READING: Litecoin vs Bitcoin