May 12 Technical Analysis: A Shift in Bitcoin (BTC) Direction?

The queen of cryptos continues to decline and is on the verge of a weekly close in the red. The breakout of this level could mean a medium-term change in direction for bitcoin (BTC).

Bitcoin (BTC) on critical support

BTC has suffered a decline since last weekend, causing a loss of more than 10% in value. Since peaking in April, the crypto has seen a 14% decline. Despite coming under heavy downside pressure in late April, bitcoin (BTC) did not show a clear direction change. Indeed, the price did not break through any major medium-term support.

However, the drop, since last weekend, caused the breakout of two important supports (at $27,664 and $27,133). This could be seen as a relevant bearish signal, as these supports were the bullish structure for bitcoin (BTC) in the medium term. The last major support preventing a correction in BTC is found at $26,556. If BTC closes the week significantly below this support, it could indicate a change in direction in the medium term. In this case, BTC could go down to $23,500.

On the other hand, if the price reacts positively to this support, it will invalidate the bearish thesis. In such a scenario, bitcoin (BTC) could reach $40,000 if it breaks above the April high ($31,000).

A weekly close in the red?

It is possible that the downward pressure will continue through the end of the week. If so, it might be a good idea to take a short sell position in bitcoin (BTC). In this case, a retracement to the previous week’s low ($27,664) could be on the cards before a further drop. It may be appropriate to sell at this time and expect a weekly close in the red.

However, if the price breaks through the high reached last Wednesday ($28,334), the short sell position will no longer be valid. However, it is likely that bitcoin (BTC) will need to overcome several short-term hurdles to continue the bull-run.

Admission: $27,664;

Stop: $28,334;

Goal: $23,500.