Key ideas:
- On Sunday, BTC fell 1.35% to close the session at $26,760.
- Nervousness over the debt ceiling resurfaced on Sunday, with investors looking forward to the meeting of the US president and the speaker of the House.
- Technical indicators remained bearish, indicating a return to below $26,000.
On Sunday, bitcoin (BTC) fell 1.35%. Reversing a 0.80% gain on Saturday, BTC ended the week down 0.66% at $26,760. Despite the bearish session, BTC avoided sub-$26,500 for the third session in a row.
A bullish start to the day saw BTC rally to a high of $27,297 in the first hour. BTC briefly broke above the first major resistance level (R1) at $27,242 before pulling back. The reversal sent BTC down to a session low of $26,693 by the end of the session. BTC fell through the first major support level (S1) at $26,937 and briefly through the second major support level (S2) at $26,747.
US Debt Ceiling Woes Overshadowed Easing Fed Fear
It was a quiet Sunday, with no crypto events to move the dial. The lack of cryptocurrency news left investors monitoring updates to Washington's debt ceiling.
Hopes were dashed that US President Joe Biden and House Speaker Kevin McCarthy would reach an agreement on Sunday over the news that talks would begin today. However, the US president addressed the debt ceiling issue in the G7 to the detriment of BTC and the crypto market in general.
President Biden had this for say,
โI will not accept a deal that protects the tax-evading wealthy and cryptocurrency traders while putting food-goers at risk.โ
Rhetoric against cryptocurrencies and the constant threat of a US default drove the cryptocurrency market into the red.
This morning, the NASDAQ mini reflected sentiment towards the debt ceiling crisis, falling 12.75 points. The downside came despite additional market reaction to Fed Chairman Powell's less aggressive talk on Friday.
the day ahead
It's a relatively busy Monday session. While there are no US economic indicators for investors to consider, the Fed talk will influence the afternoon. FOMC members Bullard, Bostic and Barkin are on the calendar to speak. Aggressive comments would recharge bets on a June interest rate hike, a bearish price scenario.
However, we expect news related to the US debt ceiling to have a bigger impact on market risk sentiment. Progress towards an agreement would provide support.
While the Fed talk and debt ceiling news will be the focal points, investors should track the crypto news wires for SEC vs. Ripple updates and Binance and coin base (CURRENCY)-Related news.
Bitcoin (BTC) Price Action
This morning, BTC was up 0.13% at $26,794. A bullish start to the day saw BTC rise from an opening price of $26,760 to a high of $26,797.
BTC Technical Indicators
Resistance and support levels
BTC needs to move through $26,917 pivot to target the first major resistance level (R1) at $27,140 and Sunday's high of $27,297. A return to $27,000 would indicate a prolonged bullish session. Crypto news wires and news related to the US debt ceiling should be crypto-friendly to support a prolonged rally.
In the event of a prolonged rally, BTC would likely test the second major resistance level (R2) at $27,521. The third major resistance level (R3) sits at $28,125.
Failure to move through the pivot would leave the first major support level (S1) at $26,536 up for grabs. However, barring a risk-driven sell-off, BTC should avoid going below $26,000. The second major support level (S2) at $26,313 should cap the downside. The third major support level (S3) sits at $25,709.
looking at the It's not and the 4-hour candlestick chart (below), were bearish signals. BTC sat below the 50-day EMA ($27,081). The 50 day EMA has pulled back from the 100 day EMA, and the 100 day EMA has pulled back from the 200 day EMA, sending bearish signals.
A move through the 50-day EMA ($27,081) and R1 ($27,140) would give the bulls a run to the 100-day EMA ($27,391) and R2 ($27,521). However, a failure to move through the 50-day EMA ($27,081) would leave S1 ($26,536) in the offing. A move through the 50 day EMA would be a bullish sign.
