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The biggest concern now is the Federal Reserve, which is scheduled to meet mid this month.
- Sell the BTC/USD pair and set a take-profit at 26,000.
- Add a stop-loss at 27,600.
- Timeline: 1 day.
- Set a buy-stop at 27,475 and a take-profit at 28,500.
- Add a stop-loss at 26,000.
The BTC/USD pair erased some of the gains made earlier this week as concerns about the Federal Reserve tightening continued. Bitcoin price dropped below $27,000, which was lower than this week’s high of $28,470.
The US is now moving past the recent debt ceiling concerns after the deal reached between Kevin McCarthy and Joe Biden. The deal is now facing just a few hurdles before it becomes law. While this is a positive thing, there is a likelihood that it presents more challenges for financial assets.
This explains why the US dollar index has jumped while the Dow Jones, S&P 500, and Nasdaq 100 indices retreated for the second day. The three dropped by more than 0.30%. Other global indices like the German DAX and French CAC 40 dropped by more than 1% on Wednesday.
The biggest concern now is the Federal Reserve, which is scheduled to meet mid this month. Analysts believe that the central bank will hike interest rates by 0.25% in June. In a statement, Loretta Mester, said that she believes that the bank should keep hiking rates. She sees no need to pause since inflation remains significantly high.
Some Fed officials, however, favor pausing in the coming meeting. Philip Jefferson, the Vice Chair, said that he believes that the bank should pause in June and observe inflation trends. He added:
“A decision to hold our policy rate constant at a coming meeting should not be interpreted to mean that we have reached the peak rate for this cycle.”
The BTC/USD pair also dropped as concerns about the global economy continued. Data published on Wednesday showed that the manufacturing PMI dropped to 48.8, signaling that the recovery is not as strong as expected.
The BTC/USD pair retreated to a low of 26,852, the lowest point since May 28. As it dropped, the pair moved below the important support at 27,475, the highest point on May 23rd and May 18. The pair also moved slightly below the 50-period moving average while the histogram of the MACD moved below the neutral point.
Therefore, the pair will likely continue slipping, with the next level to watch will be at 26,000. The stop-loss of this bearish view will be at 27,475.
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