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As we approach mid-May, it’s crucial to pay attention to the direction of the market. The intersection of the rising trendline and declining line at the top of the wedge is a key point to watch. This week will be the first test of the trendline as support, and if it holds, we may see a bullish continuation for Bitcoin. Resistance levels to watch for include the 20-Day MA and the top line of the wedge, which have recently converged around a similar price area.
In the near-term, an inside day breakout could lead to a test of resistance lines. If today’s high is exceeded, we could see a bounce up towards these levels. However, a drop below 56,159 could indicate a bearish signal, with Bitcoin potentially heading towards lower price zones around 53,000 to 51,639. Further support levels include the 200-Day MA at 49,489 and the previous trend highs from January and February.
It’s worth noting that Bitcoin has already experienced a 23.4% decline from its recent record high, showing slightly more weakness than in previous corrections. This could indicate the potential for a more aggressive selling trend if further correction occurs.
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