The BTC/USD pair jumped as investors embraced a risk-on sentiment after Speaker Kevin McCarthy reached a deal with the White House.
- Buy the BTC/USD pair and set a take-profit at 29,000.
- Add a stop-loss at 26,000.
- Timeline: 1-2 days.
- Set a sell-stop at 27,000 and a take-profit at 26,000.
- Add a stop-loss at 28,500.
The BTC/USD pair drifted upwards during the weekend after it dropped to a low of 25,917 during the weekend. It rose to a high of 28,000, the highest level in more than two weeks. Other cryptocurrencies followed suit, with Ethereum jumping to $1,850 and BNB hitting $310.
The BTC/USD pair jumped as investors embraced a risk-on sentiment after Speaker Kevin McCarthy reached a deal with the White House. The deal, if passed, will see the US avoid a historic default that would have roiled the market.
Most analysts believe that the American Congress will pass the debt ceiling bill this week. Still, since the bill is a compromise, it will likely meet some opposition from members of both parties.
The deal is seen as being positive for Bitcoin for two main reasons. First, it will eliminate the risk of America’s default, which would be bad for all assets. Second, it will lead to more US government debt in the coming years. Many Bitcoin holders believe that it is a better alternative to the US dollar now that the country has over $31 trillion in debt.
However, there are several cons to the deal. For example, the deal eliminates one of the biggest risks in the market. As a result, it will push the Fed to consider another rate hike in June. Besides, data published on Friday showed that the country’s personal consumption expenditure (PCE) rose in April.
The PCE is an important number since it is the Fed’s favorite inflation figure. As a result, we could see more dollar strength considering that the DXY index has jumped sharply in the past few weeks.
The BTC/USD pair has made a strong recovery in the past few days. As it rose, it moved above the important resistance level at 27,504, the highest point on May 15 and May 23rd. The pair has moved above the 50-period moving average. Further, the MACD has moved above the neutral level while the Relative Strength Index (RSI) has jumped above the overbought level.
Therefore, the pair will likely continue rising as investors embrace a risk-on sentiment. If this happens, the next price to watch will be at 29,000. The stop-loss of this forecast will be at 26,500.
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