BTC Bulls to Target $27,500 on Progress Toward Debt Ceiling Deal

Key Insights:

• On Friday, BTC gained 0.19% to end the session at $26,911.
• Less hawkish Fed Chair Powell forward guidance delivered support, while stalled US debt ceiling talks weighed on BTC and the broader market.
• The technical indicators remained bearish, signaling a return to sub-$26,000.

On Friday, bitcoin (BTC) gained 0.19%. Partially reversing a 2.06% loss from Thursday, BTC ended the day at $26,911. Despite the bullish session, BTC fell short of the $27,500 handle for the first time in three sessions.

After a range-bound morning, BTC struck a mid-afternoon high of $27,219 before hitting reverse. Falling short of the First Major Resistance Level (R1) at $27,440, BTC fell to a mid-afternoon low of $26,667. However, steering clear of the First Major Support Level (S1) at $26,347, BTC retested resistance at $27,000 before easing back.

Fed Chair Powell and US Policymakers Delivered a Choppy Session

It was a quiet Friday session. There were no US economic indicators to distract investors, leaving Fed chatter and US debt ceiling-related news to move the dial.

Fed Chair Powell delivered a less bullish-than-expected speech on monetary policy, easing bets on a June interest rate hike.

While the Fed Chair noted that it remained unclear whether further interest rate hikes are needed, Powell said the aggressive policy moves will allow the Fed to consider the stats and make “more careful assessments.”

According to the CME FedWatchTool, the probability of a 25-basis point June interest rate hike stood at 18.6% on Friday, down from 35.6% on May 18.

However, the news of GOP negotiators halting debt ceiling talks weighed on investor sentiment. The downside was modest, with policymakers saying that talks would resume. Notably, the debt ceiling-related news coincided with Fed Chair Powell’s speech.

On Friday, the NASDAQ Composite Index fell by 0.24%, with the S&P 500 and the Dow seeing losses of 0.14% and 0.33%, respectively.

There were no crypto events to move the dial on Friday. However, updates from the ongoing SEC v Ripple case and Coinbase (COIN) attempts to force the SEC into providing regulatory clarity drew interest.

The Day Ahead

It is a quieter Saturday session, with no US economic indicators for investors to consider. However, Fed Chair Powell’s speech will likely resonate as investors monitor updates from Washington on US debt ceiling negotiations. Progress toward a debt ceiling deal would support BTC and the broader market.

However, investors should monitor the crypto news wires for SEC v Ripple updates and Binance and Coinbase-related news.

Bitcoin (BTC) Price Action

This morning, BTC was flat at $26,911. A range-bound start to the day saw BTC fall to an early low of $26,902 before steadying.

Technical Indicators

Resistance & Support Levels

BTC needs to move through the $26,932 pivot to target the First Major Resistance Level (R1) at $27,198 and the Friday high of $27,219. A return to $27,000 would signal an extended bullish session. The crypto news wires and US debt ceiling-related news should be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $27,484 and resistance at $27,500. The Third Major Resistance Level (R3) sits at $28,036.

Failure to move through the pivot would leave the First Major Support Level (S1) at $26,646 in play. However, barring a risk-off-fueled sell-off, BTC should avoid sub-$26,000. The Second Major Support Level (S2) at $26,380 should limit the downside. The Third Major Support Level (S3) sits at $25,828.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was bearish signals. BTC sat below the 50-day EMA ($27,163). The 50-day EMA pulled back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, sending bearish signals.

A move through the 50-day EMA ($27,163) would support a breakout from R1 ($27,198) to target R2 ($27,484) and the 100-day EMA ($27,510). However, failure to move through the 50-day EMA ($27,163) would leave S1 ($26,646) in view.