Bitcoin Price Outlook: May 9, 2016

Bitcoin Price Outlook May 9 2016

The price of bitcoin price rebounded to rise 1.7% over the past week. The price fell below $442 to start the week, six days after bitcoin set a 2016 closing high of $467 in April. This was a major resistance level and selloffs are normal following an initial attempt to break above key resistance.

 

Weekly Bitcoin Price Chart

Source: tradeblock.com


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Bitcoin Price Outlook for the Week Ahead

The price has been consolidating below last week’s high and looks poised to retest the $463-$467 area. The price remained range bound for most of last week and has been in a tight trading range since May 6th.  

It is important to note that the area above the $467 level contains major supply from when the price reached its 2015 intra-day high of $500 back on November 4th. In order to convincingly break above annual highs and hold, volume will need to increase from the relatively low levels we have seen thus far in 2016.  

If a breakout occurs on the upside, aided by the aforementioned boost in volume, a test of the $500 area could come rapidly. The momentum indicators also remain bullish. The MACD is close to making a bullish crossover and the RSI has maintained bullish momentum while the price was consolidating and is now pointing towards higher price levels (see chart below).

On the downside, support can be found at $450 and $442.

Bullish Technical Bitcoin Dollar Price Chart RSI MACD

Source: tradingview.com


Elizabeth Hamilton is the Director of Trading at itBit. She manages itBit's OTC agency trading desk, working closely with OTC traders through settlement. Elizabeth has been trading and performing market analysis in the bitcoin space since 2013. Prior to joining itBit, she worked at Noble Markets helping to design and build the firm's proprietary crypto-asset marketplace. She also performed primary research on bitcoin and emerging digital currency markets while at ARK Investment Management. Elizabeth holds a bachelor's degree in Physics from Swarthmore College.

 

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*All data and references are current as of 12:00PM EST on 5/9/2016.

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