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The BTC/USD pair also jumped even as bank stocks soared.
- Buy the BTC/USD pair and a take-profit at 29,000.
- Add a stop-loss at 26,400.
- Timeline: 1-2 days.
- Set a sell-stop at 26,900 and a take-profit at 25,000.
- Add a stop-loss at 28,500.
The BTC/USD rebounded in the overnight session as hopes of a debt limit deal jumped. Bitcoin jumped to a high of $27,372, much higher than this week’s low of 25,763. This price is almost 12% below the highest point in April.
The BTC/USD pair jumped after Tether announced that it will buy Bitcoin with some of the profits. The company will allocate about 15% of its profits to Bitcoin and gold. Tether also owns gold as part of its basket of assets.
Tether makes most of its money by just investing in government bonds, which is seen as the safest place to pack funds. With interest rates rising, the company is making hundreds of millions of dollars every quarter.
Bitcoin also rose as its correlation with American stocks continued. In the United States, all the major indices jumped by more than 100 basis points. The tech-heavy Nasdaq100 index jumped by over 140 points while the Dow Jones and S&P 500 indices rose by 400 and 50 points, respectively. At the same time, the US dollar index also jumped by over 20 basis points.
The main catalyst for this rally was the rising optimism that the American government will not default. Joe Biden said that he was confident that the US will raise its debt ceiling and reiterated that talks with the house speaker were civil and respectful. Also, he said that he was open to resolving the work requirement issue as part of proposals by Republicans.
The BTC/USD pair also jumped even as bank stocks soared. The most vulnerable regional banks like Western Alliance and PacWest jumped by double digits. Recently, Bitcoin has done well when regional bank stocks retreated.
The BTC/USD pair drifted upwards but remained sharply lower than the highest point this year. It managed to move above the 25-period moving average and the important resistance point at 26,908, the lowest point on April 24. The Relative Strength Index jumped above the neutral point at 50 while the Awesome Oscillator is oscillating at the neutral point.
Therefore, the outlook for BTC is neutral with a bullish bias. A move above the important resistance at 27,714 (May 15 high) will signal that bulls have prevailed, which will see it eye the next psychological level at 29,000.
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