BTC Turns Bullish, But Recession Fears Remain Risk Below $26,000

Sub Levels

Key Insights:

  • On Wednesday, BTC rose 1.37% to close at $27,425.
  • Progress towards the US debt ceiling deal and the SEC v. Ripple ruling supported the bullish trading.
  • However, technical indicators remain bearish and suggest a return to below $26,000.

Bitcoin (BTC) rose 1.37% on Wednesday. Reversing a 0.52% loss from Tuesday, BTC ended the day at $27,425. Despite the bullish trading, BTC has fallen below his $28,000 handle for the seventh time in a row.

On a bearish morning, BTC fell to late morning lows of $26,612. BTC has broken out of the first major support level (S1) at $26,860 and moved up to the late session high of $27,532. BTC broke the first major resistance level (R1) at $27,281 and briefly breached the second major resistance level (R2) at $27,507 to end the day at $27,425.

Easing Concerns about U.S. Default Offsets Growing Fears of Economic Recession

It was a relatively quiet Wednesday session. The US economic data had a limited impact on BTC and the broader crypto market, with housing sector data in focus.

A light economic calendar meant news related to the US debt ceiling had an impact in the afternoon. Progress toward a debt ceiling deal has eased concerns about U.S. payment defaults and boosted demand for riskier assets.

On Wednesday, the Nasdaq Composite Index rose 1.28%, while the S&P 500 and Dow were up 1.19% and 1.24% respectively. The Nasdaq Mini fell 2.75 points this morning.

Nasdaq – BTCUSD 180523 Daily Chart

The Cryptocurrency Newswire also provided direction along with the ongoing SEC vs. Ripple update.

Significantly, Judge Torres rejected the SEC’s motion to seal documents related to the famous Willian Hinman speech. Ripple’s victory could end SEC regulation with a mandatory enforcement mantra.

the day ahead

It’s a busier Thursday session. US initial unemployment claims and the Philadelphia Fed manufacturing index will have an impact in the afternoon. An unexpected increase in unemployment claims and a fall in the manufacturing index would heighten recession fears and test appetite for riskier assets.

But a deal to avoid a U.S. default would boost demand for riskier assets.

Beyond the US economic calendar and debt crisis, investors should continue to monitor the SEC v. Ripple case update and Binance and Coinbase (COIN) related news. After the Hinman decision, investors will likely expect more activity and resolution in the SEC v. Ripple lawsuit.

Bitcoin (BTC) price fluctuations

BTC fell 0.02% to $27,420 this morning. The day started inside a range, with BTC rallying to early highs of $27,442 before falling to lows of $27,414.

BTCUSD 180523 daily chart

BTC Technical Indicators

Resistance and support levels

BTC needs to avoid the $26,847 pivot to target the first major resistance level (R1) at $27,767. A breakout of Wednesday’s high of $27,532 will indicate an extended bullish session. Cryptocurrency news and US debt ceiling related news should be crypto-friendly to support the long-term rally.

If the rally continues, BTC will likely test the second major resistance level (R2) at $28,110 and the resistance at $28,500. The third major resistance level (R3) is at $29,030.

After passing the pivot, the first major support level (S1) at $26,847 is applied. However, Bitcoin should avoid going below $26,000 unless a Washington-led selloff occurs. The second major support level (S2) of $26,270 should cap the downside. The third major support level (S3) is $25,350.

BTCUSD 180523 hourly chart

Looking at the EMA and the 4-hour candlestick chart (below), it was a mixed signal. BTC has broken below the 100-day EMA ($27,656). The 50-day EMA has narrowed to the 100-day EMA, but the 100-day EMA has pulled back from the 200-day EMA, giving a mixed signal.

A breakout of the 100-day EMA ($27,656) will support breakouts from the R1 ($27,767) and 200-day EMA ($27,904) and push the bulls into R2 ($28,110). You can. However, a break below the 50-day EMA ($27,283) will put S1 ($26,847) into view.

BTCUSD 180523 4-hour chart

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