BTC and a Run at $27,500 in the Hands of PMIs and Debt Ceiling News

Key Insights:

• On Monday, BTC gained 0.41% to end the session at $26,869.
• A quiet start to the week left investor sentiment toward the US debt ceiling and the NASDAQ Composite Index to influence.
• However, the technical indicators remained bearish, signaling a return to sub-$26,000.

On Monday, bitcoin (BTC) rose by 0.41%. Partially reversing a 1.35% loss from Sunday, BTC ended the day at $26,869. Despite the bullish session, BTC fell short of $27,500 for the fourth consecutive session.

A bearish start to the day saw BTC fall to a first-hour low of $26,547. Steering clear of the First Major Support Level (S1) at $26,536, BTC rose to an early afternoon high of $27,130. However, falling short of the First Major Resistance Level (R1) at $27,140, BTC eased back to end the day at $26,869.

Hopes of a US Debt Ceiling Deal Delivered Support

It was a quiet start to the week, with no US economic indicators to influence the afternoon session. The lack of stats left investors to monitor US debt ceiling-related news throughout the day.

Speaker of the House Kevin McCarthy provided optimism, saying talks were moving in the right direction.

Fed commentary also drew interest, with Neel Kashkari reportedly on the fence on whether to vote in favor of an interest rate hike or hit the pause button next month.

According to the CME FedWatch Tool, the probability of a 25-basis point interest rate hike increased from 17.4% on May 19 to 25.7% on Monday.

The NASDAQ Composite Index and the S&P 500 saw gains of 0.50% and 0.02%, respectively, while the Dow fell by 0.42%.

The Day Ahead

It is a busy Tuesday session. US services and manufacturing PMI numbers will influence the afternoon. While the manufacturing PMI will draw interest, the services PMI should have more impact. However, investors should consider the sub-components, including employment, prices, and new orders.

With private sector activity in focus, investors should also monitor FOMC member chatter with the media. A hotter-than-expected services PMI and hawkish Fed commentary would refuel bets on a June interest rate hike.

However, US debt ceiling-related news will remain the focal point.

While the PMIs, Fed chatter, and debt ceiling updates will influence, investors should track for SEC v Ripple updates and Binance and Coinbase (COIN)-related news.

Bitcoin (BTC) Price Action

This morning, BTC was flat at $26,870.

BTC Technical Indicators

Resistance & Support Levels

BTC needs to avoid the $26,849 pivot to target the First Major Resistance Level (R1) at $27,150. A move through the Monday high of $27,130 would signal an extended bullish session. The US economic indicators and US debt ceiling-related news should be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $27,432 and resistance at $27,500. The Third Major Resistance Level (R3) sits at $28,015.

A fall through the pivot would bring the First Major Support Level (S1) at $26,567 into play. However, barring a risk-off-fueled sell-off, BTC should avoid sub-$26,000. The Second Major Support Level (S2) at $26,266 should limit the downside. The Third Major Support Level (S3) sits at $25,683.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was bearish signals. BTC sat below the 50-day EMA ($27,033). The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, sending bearish signals.

A move through the 50-day EMA ($27,033) and R1 ($27,150) would give the bulls a run at the 100-day EMA ($27,330) and R2 ($27,432). However, failure to move through the 50-day EMA ($27,033) would leave S1 ($26,567) in view. A move through the 50-day EMA would be a bullish signal.