Bitcoin has had a difficult performance in May as it has dropped by over 10% from its peak even as the Nasdaq 100 index has broken out.
- Sell the BTC/USD pair and set a take-profit at 26,100.
- Add a stop-loss at 27,600.
- Timeline: 1-2 days.
- Set a buy-stop at 27,180 and a take-profit at 28,000.
- Add a stop-loss at 26,100.
The BTC/USD exchange rate moved sideways as the focus remained on the debt ceiling issue in the United States. The pair was trading at 26,900, where it has been since Friday. This price is a few points above the month-to-date low of 26,125.
The main catalyst for Bitcoin and other financial assets this week is the debt limit issue as the clock to June 1st ticks. Joe Biden talked with Speaker Kevin McCarthy who has insisted that the US slash its spending.
Talks between Democrats and Republicans will restart on Monday as the two sides work to gain concessions. In a statement on Sunday, Biden called some of McCathy’s proposals like reducing the funding to the IRS and the student debt issue unrealistic.
Bitcoin also reacted to a positive statement by Neel Kashkari, the head of the Minneapolis Federal Reserve. In a statement, Kashkari, who is a well-known hawk, said that he could support holding interest rates steady in the upcoming meeting in June.
Leaving rates unchanged will help the bank to assess the impact of past interest rate increases. In its meeting this month, the bank decided to hike rates to the range of between 5% and 5.25%. And in past statements, officials have hinted that the next rate decision will be a close call.
The next important catalyst for the BTC/USD will be the Fed minutes scheduled for Wednesday this week. These minutes will provide more information about what the Fed deliberated in its last meeting in May.
Bitcoin has had a difficult performance in May as it has dropped by over 10% from its peak even as the Nasdaq 100 index has broken out. In the past, the two assets had a close correlation since they are seen as risky assets.
The pair is consolidating at the 25-day and 50-day exponential moving averages (EMA) while volume has been falling, Liquidity in crypto exchanges has also dropped sharply in the past few days. The current price has also coincided with the lowest point on April 24.
Therefore, the BTC/USD pair will likely continue consolidating at this level on Monday. If there is a major move, the pair will likely retest this month’s low of 26,100. A bullish breakout will only be confirmed if it moves above the resistance at 27,680.
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