The gloomy month of May for bitcoin
An analysis by CoinDesk yesterday shows that the 5-month moving average (MA) has been pushed below the 10-month moving average for the first time since way back in June of 2014. This bearish indicator confirms the view that the long-term bull market has ended and bitcoin could be in for further losses. In May, the price of bitcoin dropped by 19 percent despite a rally at the end of the month. There are other bearish indications as well.
Going by the monthly chart only the BTC price could drop down as far as the support of $6,000, the February low. The decline could go even further towards $4,384 the Fibonacci retracement. The Fibonacci retracement is explained here and on the You Tube video below.
However the short term duration chart shows there could be a rally up to $7,800 in the short term before the long term bearish signs come to pass. The 4-hour chart shows another higher low when the price recovered from the $7,414 low yesterday. The 50 candle MA has now shed its bearish bias and the relative strength index (RSI) is also above 50 a bullish sign.
Bitcoin created another higher low (bullish pattern) as it recovered from the low of $7,414 yesterday. The 50-candle MA has now shed bearish bias and the RSI is above 50.00 (bullish territory) and rising. There is scope for a rally as high as $7,818.
The CoinDesk outlook
The CoinDesk analysis concludes: “The 5-month and 10-month MA bearish crossover has boosted the odds of a drop below the February low of $6,000. In the short-term, bitcoin could rise to $7,818, while a high-volume break above the falling trendline hurdle would open the doors to $8,310 (5-month MA). However, only a convincing move above $9,990 (recent high) would revive the long-term bullish outlook. Bearish scenario: Bitcoin could drop below $7,000 over the weekend if the cryptocurrency closes (as per UTC) below the descending (bearish) 10-day MA, currently located at $7,419.”
Present situation
On June 2, Saturday the BTC price opened at $7,518.24. The high was $7,6683.20 and the low $7,463.13. At the close it was $7,636,19. It is now June 3 in UTC 01:09 and the price of BTC is at about the high for the day so far at $7,652. The present price can be found here.
So far there is no bearish trend and the price is still not up to the $7,818 level. It remains to be seen if there will be a downward trend later in the day which the technical analysis indicates as probable.
