Bitcoin price analysis for May 18-24: BTC could rally to $10,250 this week

Institutional investors are taking a greater interest in Bitcoin, which suggests that higher levels are likely in the next few days

The institutional interest in Bitcoin has picked up following its third halving. On May 14, when Bitcoin hit a high of $9,960.65, the Chicago Mercantile Exchange, or CME, hit new records for Bitcoin futures open interest and Bitcoin options open interest. When the open interest increases just before or after the event, it is usually a bullish sign as it shows confidence among the traders that higher levels are likely.

One of the reasons for institutions’ bullish positioning on Bitcoin could be the possibility of negative rates in the US. With President Trump pressurizing the Fed for negative rates, it could become a reality within the next few months. 

A report by Stack Funds states that institutional investors will look for new opportunities to earn higher yields in a negative interest rate environment. “Bitcoin is an asset born from a recession, and will further prove its robustness through a recession,” the report added.

The current crisis bodes well for Bitcoin in the future. Does the short-term trend also signal a possible move higher? Let’s do the Bitcoin price trend analysis of the daily chart to find out the path of least resistance.

Bitcoin price technical analysis: daily chart 

Bitcoin has been trading inside the ascending channel for the past few weeks. Both moving averages are sloping up and the RSI has been trading above the 50 levels, which suggests that the trend is up and bulls have the upper hand.

Though the bears are mounting a stiff resistance at the $10,000 levels, the positive thing is that the bulls have not given up much ground. This suggests that the sentiment is to buy the dips as the bulls expect higher levels in the next few days.

This week, the bulls are likely to make another attempt to drive the BTC to USD pair above the $10,000 level and the downtrend line of the symmetrical triangle. If successful, the pair is likely to pick up momentum and rally towards $14,000.

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However, the bears are unlikely to give up easily. They will attempt to stall the rally at $12,000 and again at $13,000. 

Conversely, the pair will signal weakness if it turns down from the overhead resistance and breaks below the channel. A break below the channel can drag the price to $8,050.50. If this support also cracks, the trend will turn in favour of the bears.

How to trade BTC

As the trend in Bitcoin is up, the traders can buy the dips to strong support levels. If the price dips to the 20-day EMA, it could offer a low-risk buying opportunity. The target objective on the upside would be $10,000 and above it $10,500. 

If Bitcoin does not dip, another possible way to trade could be to buy the breakout of $10,000. The traders can wait for the price to sustain above $10,000 for four hours and buy with a close stop-loss. Partial profits can be booked closer to $10,500 and the stop-loss on the rest of the position can be trailed higher because a breakout of the $10,500 could be a huge positive.

Bitcoin to US Dollar
Daily change
16811.2
Low: 16763.3
High: 17074.3

FURTHER READING: Seven ways to make money with Bitcoin

FURTHER READING: Bitcoin explained simply: everything you need to know

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