Bitcoin price analysis for May 6-11: crypto could reach $10,000 before halving

As the halving approaches, opinion on the future direction of Bitcoin remains divided, with high volatility offering opportunities to traders

The US government is on a money printing spree to revive the economy burdened by the coronavirus pandemic. The national debt continues to rise and is nearing $25tr (£20tr, €23tr). This is likely to lead to a hyperinflationary environment in the future.

Compared to that, 0'>Bitcoin will cut its inflation in half in about six days. Galaxy Digital CEO Mike Novogratz said that several hedge funds are investing in Bitcoin and he expects official announcements on the purchases soon.

While a few analysts expect the price to rally after halving, a few others believe that the price could drop following the event. This shows that the traders are undecided on what direction Bitcoin would take after halving.

Do the technicals provide a clearer picture? Let’s do the Bitcoin price trend analysis to find the path of least resistance in the short-term.

Bitcoin price technical analysis: weekly chart

Bitcoin surged 15.62 per cent last week. This was the seventh successive weekly close in the green from the lows of $3,777. This suggests that the bulls continue to buy at every higher level, which is a huge positive.

The 20-week EMA has started to turn up and the RSI has risen into positive territory. This suggests that the bulls have the upper hand. The next level to watch out for on the upside is a rally to the downtrend line of the symmetrical triangle at $10,000.

This is a critical level because if the bulls can propel and sustain the price above the triangle, it can start a new long-term uptrend that could reach $14,000 levels.

However, the bears are unlikely to give up easily. They are likely to put up a strong defence at the downtrend line, which could result in a few days of minor correction or consolidation. If the bulls do not give up much ground, it would indicate strength and increase the possibility of a breakout above $10,000.

The 0'>Bitcoin price analysis of the weekly chart suggests that bulls have the upper hand. Can the momentum pick up and carry the price above the overhead resistance of the downtrend line? Let’s study the daily chart to see if we spot any bullish setups. That would help us do the Bitcoin price weekly analysis for May 6-11.

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Bitcoin price technical analysis: daily chart

Bitcoin surged above the overhead resistance of $8,191 on April 29. That was followed by another sharp move to $9,477.55 on the next day, but the bulls could not sustain the higher levels, which shows that the bears are aggressively defending the $9,221.45-$10,000 mark.

Currently, the price is attempting to break out of the bullish pennant, which is a continuation pattern. Both moving averages are sloping up and the RSI is in the overbought zone, which suggests that bulls have the upper hand.

If the bulls can sustain the price above the pennant, the uptrend is likely to resume. The pattern target of this setup is $10,867.55. However, the bears are likely to defend the $10,000-$10,500 zone aggressively.

The Bitcoin price trend analysis of the daily chart also paints a positive picture, but the bulls are likely to hit a barrier around $10,000 levels.

How to trade Bitcoin this week

Bitcoin’s halving is a major event that is six days away. It is difficult to predict how Bitcoin’s price will react to this event. The traders too are in a state of confusion. Hence, this is likely to result in a volatile environment when both the bulls and the bears fight it out to gain the upper hand.

The traders can buy if 0'>BTC closes (UTC time) above the pennant with a target objective of $10,000. If the bulls struggle to scale the price above this level, the short-term traders can plan to go short. As the volatility is likely to remain high, traders should be ready to take the trade either on the long side or the short side.

Bitcoin to US Dollar
Daily change
16970.2
Low: 16938.4
High: 17092.5

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

FURTHER READING: Make money with cryptocurrency

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