Bitcoin (BTC) starts a new week in an altogether different mood as the weekly candle close brings a move higher.The largest cryptocurrency, still stuc
Bitcoin (BTC) starts a new week in an altogether different mood as the weekly candle close brings a move higher.
The largest cryptocurrency, still stuck in a narrow range, is at last showing signs of life after several spikes to two-month lows.
With volatility back in play, traders nonetheless remain conflicted — can short-timeframe strength lead to an overall trend breakout?
Opinions differ as May comes to an end, and brings with it a macroeconomic showdown, which is already making itself felt — the United States debt ceiling deal.
With an agreement to raise the ceiling and avoid a U.S. government default almost here, risk assets may see relief across the board. Since stock markets are closed until May 30, however, it will be a game of “wait and see” for Bitcoin traders to start the week.
BItcoin itself, of course, is always open, and the debt ceiling appears to have formed an impetus for optimism despite representing little in terms of macroeconomic policy trends.
With that, the conversation within crypto is all about what happens next.
Cointelegraph takes a look at these and some other important factors to consider when it comes to BTC price action in the coming days.
Debt ceiling deal nears Congress
After several weeks of drama, the Biden administration has formed and presented a solution to the U.S. debt ceiling debacle and presented it to Congress.
While it remains unknown whether it will pass, bets are already frontrunning the outcome.
“I think it is virtually certain that it will be passed,” Jeremy Siegel, professor of finance at the University of Pennsylvania, told CNBC, summarizing a popular theory.
A true doom scenario, others have pointed out, is unlikely, as the deal stalling at this point does not immediately open the U.S. to a default scenario.
“The coming week will still bring uncertainty around the debt ceiling as the agreement makes its way through Congress,” trading firm Mosaic Asset continued in the latest edition of its newsletter series, “The Market Mosaic.”
“We’ll also get an updated report from the ISM on manufacturing sector activity, plus the May jobs report. Regardless of those headlines, I’m watching the action in the average stock and cyclical sectors most closely.”
News of the deal itself, meanwhile, worked instant magic on a lackluster BTC/USD, which saw some classic end-of-week volatility to briefly hit $28,450 overnight.
Currently trading at just below $28,000, the pair has managed to improve its outlook, even as it concerns the intraweek trend.
“Now that’s a really good BTC Weekly Close,” popular trader and analyst Rekt Capital responded.
“$BTC lost ~$27600 as support two weeks ago and now has positioned itself for a retest/reclaim of this same level.”
Rekt Capital had previously warned about a looming broader breakdown which could take BTC price action back toward $20,000.
“Dip into black would be healthy and successful retest there could position BTC for a revisit of ~$28800,” he now said, flagging the zone to hold in the event of a subsequent dip to support.
Analysis further raised the possibility of Bitcoin invalidating a recently-formed head and shoulders pattern on daily timeframes, this typically linked to the start of a long-term bearish phase.
#BTC has successfully Daily Closed above the red box top
Now a dip for a retest of the red box top may now be in progress
A successful retest at $27600 would not only set $BTC up for a revisit for the higher $28000s
But also invalidate the Head & Shoulders#Crypto #Bitcoin https://t.co/bhED0LiXV8 pic.twitter.com/p1wZvJh3KU
— Rekt Capital (@rektcapital) May 29, 2023
“BTC is in a very early Bull Market,” Rekt Capital added.
CME gap guides BTC price dip bets
With that, Bitcoin is providing fuel for debate as bulls inch closer to testing the top of what has been a stubborn multi-month trading range.
Those betting on downside continuing this week have already been caught short — literally. Short traders saw $44 million of positions liquidated on May 28 alone, which according to monitoring resource CoinGlass represents a one-month high.
This move up is just bears getting squeezed shorting, sideways action as bears reload their shorts, then another squeeze stopping them out again, rinse and repeat lol. We probs continue pushing up until these bears calm tf down. $BTC https://t.co/VSB7mqts9q pic.twitter.com/rEhyHmtfLY
— CrediBULL Crypto (@CredibleCrypto) May 29, 2023
For well-known market participants, however, there is still cause to stay conservative on what comes next.
Trader Skew noted that Bitcoin’s weekend upside had opened up a gap in CME futures, with the implication that BTC/USD should dip lower to “fill” it at the open.
“Could see a sell off post debt ceiling deal & then gold / btc go on a run before the final rug,” part of Twitter commentary stated on May 29.
Fellow trader Mark…
cointelegraph.com