Bitcoin Price Outlook: Week of May 23, 2016


The bitcoin price failed to rally last week despite key indicators being bullish. When price does not follow indicators, a breakdown is likely and that’s exactly what happened. Bitcoin price dropped below $440, ultimately settling in the low-$440s.


Weekly Bitcoin Price Chart 5-23-2016



Bitcoin Price Outlook for the Week Ahead

The two key short term support areas mentioned in our last price outlook - $447 and $440 - were broken over the past week and traders should expect more volatility in the near-term. The price is now fighting to find support in the $440 area, but this will be challenging.  

There has been a negative crossover of the moving averages and they are pointing towards lower prices. Another bearish sign: the bitcoin price fell below the 50-day EMA last week for the first time since mid-March. The indicators looked to have put in a short-term bottom last week. However, what was once a key support level at $447 now becomes short-term resistance.

$443 is an important price level on long-term charts as this was the 50-day EMA that was taken out last week. $435 is now the most immediate support level with stronger support at $430. If these levels don’t hold, we could see a fast decline into major support between $415 - $420.

In short, there is currently a lot of overhead resistance. Without big buy-side volume coming into play, it will be a challenge to climb higher.

Bitcoin Price Outlook Technical Chart 5-23-16

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 4:00PM EST on 5/16/2016.

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