The ongoing debt ceiling negotiations in the United States have left traders on edge, with JPMorgan Chase CEO Jamie Dimon warning that a potential US government default may lead to panic in the stock markets and increased volatility. Crypto investors now face the question of how Bitcoin will react to such an event. Bloomberg’s latest Markets Live Pulse survey suggests that Bitcoin could become the third most preferred asset class, following gold and US Treasuries, should the US government fail to prevent a debt default.
Billionaire fund manager Paul Tudor Jones claims he’s holding onto his Bitcoin, with a portion of his portfolio always allocated to it. The uncertainty around the debt ceiling negotiations raises questions regarding the key support and resistance levels for not only the S&P 500 Index but also Bitcoin and major altcoins.
Both the gradually rising 20-day EMA and the relative strength index (RSI) near the midpoint in the S&P 500 Index price analysis indicate short-term range-bound action. However, if the price falls below the 50-day SMA, it could plummet to 3,800. Success for the bulls requires clearing the 4,200 hurdle, followed by flipping 4,200 into support.
The U.S. dollar index (DXY) price analysis showed that bulls overcame 50-day SMA resistance on May 12, and with the 20-day EMA gradually rising, bulls seem to have a slight edge. Despite this, a drop below the 20-day EMA could signal a bear trap, potentially leading to a retest of the 100.82 support level.
Regarding Bitcoin price analysis, the bulls aim to push Bitcoin back into the symmetrical triangle pattern. The relief rally is expected to face strong resistance at moving averages, and then at the resistance line of the triangle. On the upside, bulls need to pass the resistance line to signal the start of a new upward move.
For Ether, the price turned up from the 50% Fibonacci retracement level and faced the 20-day EMA. Bears will fight to flip the support line into resistance, indicating that higher levels attract sellers.
While the outlook for the crypto market remains uncertain due to debt ceiling negotiations, some assets like Bitcoin and Ether show potential for growth. Investors should keep a close eye on these developments and conduct thorough research before making any investment decisions.
Source: Cointelegraph
