In recent days, the impressive surge of Bitcoin (BTC) towards $27,000 has generated a sense of excitement and anticipation among traders. As BTC dipped to $26,870 after the daily close, many traders hoped the cryptocurrency would find its direction or touch more significant levels up or down.
Popular trader Crypto Ed has suggested potential targets for market performance, including the “gap” in CME futures that was created over the weekend. Currently, it seems that action on the lower timeframe is where the real excitement lies, with higher timeframes being more subdued. The CME gap to the downside is situated between $26,500 and $26,800 – just below the overnight lows.
Furthermore, Crypto Ed speculates that the bounce after the gap could take BTC back to its range highs at $28,800, though downside possibilities leave $24,000 still in play. Other market participants are similarly cautious, with trader Jackis describing Bitcoin as “very hard to read” under current circumstances. He suggests that weekly continuation and daily breakdown could be possible for the cryptocurrency. Should deeper pullbacks occur, higher levels could still be reached on weekly timeframes since the weekly structure remains bullish.
The unfolding of the burgeoning debt ceiling crisis in the United States has also led to some macro considerations for Bitcoin. With the June 1 deadline fast approaching for potential default, markets have started feeling the pressure, according to trader Skew. His observations regarding the US dollar index (DXY) point towards a likelihood of increased volatility and decreasing liquidity in the coming weeks, particularly around the deadline period. The DXY is usually inversely correlated with BTC price performance to some extent and has been trending lower after a week of snap gains.
This week’s main macro event consists of public commentary by Jerome Powell, Chair of the Federal Reserve, on May 19. As the cryptocurrency market continues to be shaped by numerous factors, investors should remain vigilant and conduct their own research to make well-informed decisions. While BTC’s path may still be uncertain in the short term, the ongoing pullback reflects the potential for new highs in the more distant future.
Source: Cointelegraph
