BTC Bulls to Target $28,000 on US Debt Ceiling Relief
Key Insights:
- On Saturday, BTC gained 0.56% to end the day at $26,885.
- Hopes of a US debt ceiling deal provided support while investors considered the Fed’s next move.
- The technical indicators turned bullish, signaling a return to $28,000.
On Saturday, bitcoin (BTC) rose by 0.56%. Following a 0.90% gain on Friday, BTC ended the day at $26,885. Significantly, BTC fell short of the $27,000 handle for the third consecutive session.
After a range-bound morning, BTC fell to an early afternoon low of $26,803 before making a move. Steering clear of the First Major Support Level (S1) at $26,414, BTC rose to a final-hour high of $26,920. However, falling short of the First Major Resistance Level (R1) at $27,002, BTC eased back to end the day at $26,885.
US Debt Ceiling Updates Delivered a Late Boost
It was a quiet Saturday session. There were no US economic indicators, leaving investors to consider the Fed’s next monetary policy move and track debt ceiling-related news from Washington.
A more bullish outlook toward the June policy decision limited the upside, with a pickup in inflation fueling bets on a 25-basis point interest rate hike. According to the CME FedWatch Tool, the probability of a June 25-basis point interest rate hike stood at 64.2%, up from 17.4% one week earlier. A pickup in US inflation and better-than-expected US economic indicators supported the shift in sentiment.
However, late in the Saturday session, progress toward a US debt ceiling deal provided support.
The Day Ahead
It is a quiet Sunday session, with the US markets closed on Monday for Memorial Day. With no US economic indicators for investors to consider, the news of the US likely to avoid a catastrophic default should provide support throughout the day. Congress will vote on the deal this Wednesday.
However, investors should continue to monitor the crypto news wires. SEC activity, SEC v Ripple updates, and Binance and Coinbase (COIN)-related news would be likely focal points.
Bitcoin (BTC) Price Action
This morning, BTC was up 0.99% to $27,152. A bullish start to the day saw BTC rise from an opening price of $26,803 to a high of $27,191. BTC broke through the First Major Resistance Level (R1) at $27,008 and the Second Major Resistance Level (R2) at $27,130.
Reports of US President Joe Biden and Speaker of the House Kevin McCarthy reaching a tentative debt ceiling deal supported the early breakout.
BTC Technical Indicators
Resistance & Support Levels
| R1 – $ | 27,008 | S1 – $ | 26,675 |
| R2 – $ | 27,130 | S2 – $ | 26,464 |
| R3 – $ | 27,463 | S3 – $ | 26,131 |
BTC needs to hold above R2, R1, and the $26,797 pivot to target the Third Major Resistance Level (R3) at $27,463 and $27,500. A move through the morning high of $27,191 would signal an extended bullish session. The news wires should be crypto-friendly to support an extended rally.
In the event of an extended rally, BTC would likely test resistance at $28,000.
A fall through the Major Resistance Levels and the pivot would bring the First Major Support Level (S1) at $26,675 into play. However, barring an event-fueled sell-off, BTC should avoid sub-$26,500 and the Second Major Support Level (S2) at $26,464. The Third Major Support Level (S3) sits at $26,131.
Looking at the EMAs and the 4-hourly candlestick chart (below), the EMAs are more bullish. BTC sat above the 100-day EMA ($27,050). The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA closing in on the 200-day EMA, sending bullish signals.
A move through the 200-day EMA ($27,411) would support a breakout from R3 ($27,463) to target $28,000. However, a fall through R2 ($27,130), the 100-day EMA ($27,050), and R1 ($27,008) would bring the 50-day EMA ($26,803) and S1 ($26,675) into view. A fall through the 50-day EMA would send a bearish signal.
