Bitcoin’s price trajectory in May hinges on a crucial decision point around the $95,000 level. After a strong rebound in April, market participants are now closely watching whether the rally has enough momentum to push higher—or if a deeper correction lies ahead. This analysis dives into Bitcoin’s recent price action across multiple timeframes, evaluates key technical indicators, and explores potential scenarios for the rest of May.
April Recovery: A Bullish Signal or Temporary Relief?
April marked a turning point for Bitcoin after a sharp 32% decline from its January all-time high. The month closed with a bullish candlestick, breaking a string of consecutive bearish monthly patterns. This reversal lifted Bitcoin’s price from $82,540 to $94,181, recovering more than half of its prior losses.
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However, despite this recovery, several warning signs suggest the uptrend may not be as robust as it appears. Most notably, Bitcoin failed to surpass the midpoint of January’s large bearish engulfing candle—a key psychological and technical threshold. Historically, failing to reclaim this midline often indicates that the downward momentum remains dominant, and the recent bounce could merely be a relief rally rather than a true trend reversal.
Additionally, Bitcoin is currently trading near the lower boundary of an ascending parallel channel, a pattern typically associated with corrective phases rather than sustained bullish trends. This positioning increases the likelihood of further downside pressure if buying interest wanes.
Technical indicators add to the caution. The Relative Strength Index (RSI) shows a bearish divergence—price made higher highs, but RSI did not follow suit—signaling weakening momentum. Though still positive, the MACD (Moving Average Convergence Divergence) is losing steam, suggesting bullish momentum is fading.
If a breakdown occurs, the next major long-term support zone lies around $60,000, a level tied to previous institutional accumulation zones and historical cycle lows.
Key Resistance Zone: $94,000–$96,000
The weekly chart reveals that Bitcoin is now at a make-or-break juncture. The recent rally brought BTC into a confluence of resistance levels between $94,000 and $96,000, formed by:
- A descending trendline resistance from the January peak
- A well-established horizontal resistance area at $94,000
- The 0.618 Fibonacci retracement level of the January-to-March drop
Bitcoin briefly pierced above $95,000 but quickly rejected, leaving behind a long upper wick—a classic sign of selling pressure at higher levels. This rejection suggests that sellers remain active in this zone and are unwilling to let price advance without a fight.
The outcome of this week’s close will be pivotal. A decisive weekly close above $96,000** could confirm bullish continuation and open the path toward new all-time highs. Conversely, a **close below $94,000 would invalidate the short-term recovery and likely trigger a deeper correction.
On the indicator front, the RSI sits just above 50—neutral territory—while the MACD is nearing a potential bullish crossover. However, these signals need confirmation from price action. Without a strong close above resistance, any bullish indicator signals may prove premature.
Daily Chart Outlook: Bearish Divergences Emerge
Zooming in to the daily timeframe reveals increasing bearish pressure. The price structure suggests a completed A-B-C corrective pattern, where wave C mirrors the length of wave A—an Elliott Wave pattern often seen before deeper retracements.
Moreover, Bitcoin has broken down from its ascending parallel channel, a structure that had supported price gains since mid-March. Breakouts below such channels often precede extended pullbacks, especially when accompanied by weakening momentum.
Crucially, both the RSI and MACD are now flashing bearish divergences—a reliable early warning sign of potential trend reversals. For the first time since the April rally began, the RSI has dipped below 50 and the MACD below zero (marked by the black circle on charts), indicating that momentum has officially shifted to the bears.
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A sustained drop this week would confirm the bearish scenario, potentially driving Bitcoin toward the $83,460–$86,230 support zone, where previous swing lows and order book density may provide temporary stabilization.
Will May Bring Correction or Continuation?
While the April rebound sparked optimism about a renewed bull run, multi-timeframe analysis paints a more cautious picture. The failure to clear key resistance levels, combined with deteriorating momentum and bearish technical structures, suggests that Bitcoin may have already formed a local top.
A correction in May is increasingly probable, with initial support expected between $83,500 and $86,200. A deeper drop toward $60,000 remains possible if macro sentiment sours or institutional demand dries up.
That said, a breakout above $96,000 with strong volume could invalidate the bearish thesis and reignite bullish momentum. Traders should monitor weekly closes and on-chain metrics for confirmation.
Frequently Asked Questions (FAQ)
Q: What is the significance of the $95,000 level for Bitcoin?
A: The $94,000–$96,000 range represents a confluence of technical resistances—trendline, horizontal price level, and Fibonacci retracement—making it a critical decision zone for Bitcoin’s trend direction.
Q: Why is the April monthly close important?
A: The bullish April candle broke a losing streak and signaled potential recovery. However, failing to surpass January’s bearish engulfing midpoint raises doubts about the strength of the reversal.
Q: What does a bearish divergence in RSI mean for BTC?
A: It means price is rising while momentum is weakening—a warning sign that upward movement may be losing steam and a reversal could follow.
Q: What are the next support levels if Bitcoin declines?
A: Immediate support lies between $83,460 and $86,230. A deeper drop could target $60,000, a historically significant long-term support.
Q: Can Bitcoin still resume its bull run?
A: Yes—if it achieves a weekly close above $96,000 with strong volume, it could confirm bullish continuation and target new all-time highs.
Q: How reliable are Elliott Wave patterns in crypto markets?
A: While not foolproof, Elliott Wave theory helps identify potential turning points and corrective structures, especially when combined with other technical tools.
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