Bitcoin has recently faced a loss of momentum and failed to hold the pending support level, leading to a decline in price. However, there are signs of hope as bulls remain active and ready to defend the price, with a bounce in sight once the support zone is reached.
On the fundamental front, the impending deadline for the US debt ceiling raises concerns and uncertainty in the crypto market. The risk of default and the potential repercussions on the economy can impact investor sentiment and lead to increased market volatility.
What should we be expecting in the markets? Did this move down mark a pullback or further downside? The charts are here to tell you all.
BITCOIN
BTC has lost momentum in the last 48 hours and since then the Pending Support did not hold. As it was highlighted in the previous analysis, “It is pending because there are not enough significant buying orders positioned there.” We had to see more bulls power to sustain a healthy bounce.
The area is marked in grey on the chart just for reference and now serves no purpose, as there are not open orders there.
Since losing the level, the price fell and it is heading for the Support Zone. It is located between $26 750 – $26 300 however it is quite likely that we will not see the price go further down than $26 500 before a bounce because the buying orders in the zone are well congested and solid.
A new resistance level has been indicated on BTC. It has moved upper than the previous level and it is positioned between $27 800 – $28 000. This area is the next target after we see a bounce in the price.
Bulls are still active and will be defending the price. Looking forward to see a move up once we have reached the Support Zone. The retracement from the pump is an opportunity to catch the bounce. Thursday is an important day for the markets – you will see why in a bit.
FUNDAMENTAL
Treasury Secretary Janet Yellen emphasized the importance of raising the US debt ceiling by June 1st, stating that it is a “hard deadline” to prevent default on the country’s obligations. In an interview, Yellen highlighted that some bills may go unpaid if the debt ceiling isn’t raised.
The impending deadline to raise the US debt ceiling can have repercussions on both the crypto and stock markets. The uncertainty surrounding the debt ceiling negotiations and the risk of default on US obligations create a sense of unease among investors and this uncertainty can lead to increased market volatility and a cautious approach from traders.
In the crypto market, the heightened risk sentiment may prompt investors to seek safer assets, such as stablecoins or even exit the market, as a means to preserve capital. This shift in preference will result in decreased trading volume, leading to a temporary slowdown and a potential drop in prices.
Moreover, the potential impact on banks and liquidity should also be considered. If the debt ceiling is not raised and the US Treasury is forced to withdraw liquidity from the market, it can create additional pressure on banks. This liquidity squeeze can further dampen market activity and affect both the crypto and stock markets.
However, it is important to note that these effects are typically temporary. Once a resolution is reached and the debt ceiling is raised, investor confidence may be restored, leading to a resurgence in market activities. Being cautious and staying liquid on June 1st is preferable.
Will be monitoring the Bitcoin Dominance indicator to track where the money will flow.
SOLANA
The price action on SOL has played out clearly since the last 2 days. A move to the Next Resistance area followed, which faced major selling pressure that retraced the price down to the last recent support.
The Next Resistance area is still valid and more orders have replaced the executed ones in the zone, although not that major ones. This is an indicator that we will not be seeing SOL reach $21.60 and above in the next days.
The Flipped Support area lacks buying momentum and there is one last standing order at $20.24. This is not a good sign for SOL, as lack of bulls action in these levels will result the price reaching lower levels.
The Support Area is valid and it is the most recent area where bulls are defending the price. It is located between $19.50 – $19.10. Currently expecting to see more selling pressure build up and a move below $20.24 for SOL opens the possibility for a short trade.
