Bitcoin has shifted from a rally into sideways action so far in May. The 1H chart shows that btcusd even formed a head and shoulders pattern, breaking the neckline during the May 6th session. During the May 7th session, we got a pullback, and it not confirm a price top.
Bitcoin (BTCUSD) 1H Chart May 8
(click to enlarge)
The head and shoulders attempt therefore was apparently a false top. The bearish momentum is lost as the RSI popped up above 60, and as it climbed above 70, it showed bullish momentum. Price was unable to hold under the 200-hour SMA after breaking below it. At best, the market is simply sideways if not bullish, but definitely not bearish at this point.
The 1H chart does not show any directional bias, although we might want to air on the bullish side for now. Because of the lack of clear signals, we should wait for a pullback towards the 230-232 area again. If price can hold above this area, and the 1H RSI holds above 40, the pressure will be back towards the 243 high on the month with risk of extending higher. However, a drop below 230 would likely reflect a market that is simply choppy with a slight bearish bias.
Bitcoin (BTCUSD) 4H Chart May 8
(click to enlarge)
While the 1H chart suggests that we should have a slight bullish bias, the 4H chart is essentially neutral with price trading around the moving averages. The RSI does not show maintenance of any directional momentum. If price does not clear above 240, there is still a bearish bias for the medium-term. If it does clear above 240, we noted the pressure on 243, but there would also be upside risk first towards a support/resistance pivot around 255, then a resistance around 260-262.
If price falls below 230, the pressure would be back towards the 214 low on the year with risk of extending at least to 200.
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Bitcoin (BTCUSD) 1H Chart May 8 bitcoin 1h chart May 8 (click to enlarge)
The head and shoulders attempt therefore was apparently a false top. […]