Bitcoin/USD price analysis: the upside looks limited
Bitcoin/USD price analysis: with seven trading days on consolidation and the Big Figure close to the 261.8 per cent extension, we look for further rallies to be limited.
Market highlights from the last week
Wednesday, April 29: Cryptocurrencies made steady gains early in European trading on Wednesday and then moved sharply higher as gains accelerated.
Thursday, April 30: After sharp gains over the previous 24 hours, cryptocurrencies were unable to make further gains on Thursday with underlying pressure for a correction, especially as there was a less robust tone in global equity markets.
Friday, May 1: Cryptocurrency volatility eased during Friday with market holidays in Europe tending to limit activity and 0'>Bitcoin was unable to hold a brief move above the $9,000 level.
Monday, May 4: There was choppy trading in cryptocurrency volatility during Monday even though there was no major turbulence among asset classes.
Tuesday, May 5: Cryptocurrency sentiment held firm on Tuesday, but confidence was rattled by 0'>Bitcoin ’s inability to hold above the $9,000 level in early Europe.
Bitcoin/USD price analysis
Let us have a look at the technical viewpoint.
Monthly: We have posted a 146 per cent recovery from the 3850-low posted on March 13, 2020.
Weekly. Seven weeks on net gains. Last week’s rally stalled at the trend of lower highs located at 9354. The trading formation known as ‘The Rule of Nine’ dictates that after nine positive or nine negative candles, we should see a correction. Previous swing high located at 10050. Support is located at 7850.
Daily: The 261.8 per cent extension from the 3783-6025 is located at 9653. From an Elliott wave viewpoint, this could be seen as the completion of a fifth wave (five impulsive waves by three corrective waves). Will there be a false breakout of the trend? The 10000 Big Figure is likely to attract profit taking.
What is your sentiment on BTC/USD?
Outlook: We have seen seven trading days on consolidation. With the Big Figure close to the 261.8 per cent extension, we look for further rallies to be limited. With support located at 7850, selling into rallies offers a sound reward and risk setup.
Possible trade setup
Action: Selling at 9800
Potential return on risk to first target: R4.8 (reward 1950 / risk 400)
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