Bitcoin price analysis: can we close above the wedge?

Bitcoin/USD price analysis A weekly close above 9195 is bullish. A clear break of the Expanding Wedge formation. Technical target 13880

Market highlights from the past week

Friday May 8: US jobs data was horrific but slightly better than consensus forecasts with non-farm payrolls declining 20.5 million and unemployment rising to 14.7 per cent.

Monday May 11: There was further choppy trading during the day with some net Bitcoin support from the ability to hold above Asian lows.

Tuesday May 12: Narrow trading ranges continued on Wednesday with Bitcoin holding near $8,900 as the dip in US equities had only a limited impact.

Wednesday May13: After a small retreat in early Europe, Bitcoin moved significantly higher with a break above $9,000 leading to further buying interest and a peak above $9,250 around the New York close.

Thursday May 14: Bitcoin made significant headway ahead of the New York open and pushed to highs above $9,900. There was, however, no attempt at testing the key $10,000 area and prices drifted lower despite underlying support when Wall Street turned positive. 

Bitcoin/USD price analysis

Let us have a look at the technical viewpoint.

Monthly: a strong recovery from the March base at 3850 (161.66 per cent from base to the May 7 high trade). Technically, there is little to take from this timeframe.  

Weekly: looks to have formed an Expanding Wedge pattern that has a bias to break to the upside. Although levels above the trend of lower highs (at 9195) found sellers last week, we have seen resumed buying interest. A weekly close above this level is important for the long-term outlook. A positive close and the measured move target is the start of the wedge at 13880.

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Daily: a 261.8 per cent extension level from 3850-7523 is seen at 13512, just inside the expanding wedge target. If we see continued upward momentum, this could be seen as the fifth wave (Elliott Wave formation). 

BTCUSDOutlook: Bitcoin/USD looks to have dropped its correlation with US indices. A weekly close above 9195 is bullish. What is then common, is for a retest of the breakout level. Going long (buying) at this point offers a solid reward against risk setup. 

Possible trade set-up

Action: On a weekly close above 9195, we look to buy a retest of 9195

Stop: 8050

Targets: 13500 and 13880

Potential return on risk to first target:  R2.97 (4305 / risk 1445)

Bitcoin to US Dollar
Daily change
17137.2
Low: 17129.8
High: 17161.2

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