Bitcoin recovered from intraweek lows below $26,000 to finish the last week on a positive note. The news of a possible debt ceiling deal between President Joe Biden and congressional republicans bolstered the big crypto to $28,000 early Monday morning. At the time of writing BTC is auctioning for $27,768, down 0.94% on the day and up 1.34% over the last seven days.
A prolonged stalemate between the White House and Republicans over the US government’s debt ceiling appeared to come to an end over the weekend when Predet Biden reached a tentative deal with Republican House speaker Kevin McCarthy on Saturday evening.
Next, the deal will now be moved to the Congress for voting and if approved, it will prevent the Biden administration from defaulting on debts.
While this paints a positive short-term picture, investors should not relax, as it could be a case of “buy the rumor and sell the news.” It remains to be seen whether the buyers will build on the weekend’s strength or lose some of the gains after the deal goes through the Congress.
The next major market moving event from the U.S. economy will take place in two weeks from now when the Federal Reserve policy rate meeting scheduled for June 14-15 takes place.
Meanwhile, let’s look at the important resistance levels that need to be scaled for the up move to continue in Bitcoin.
Bitcoin Price Seeks To Escape From A Bearish Triangle
The failure of the sellers to pull the BTC price below the $25,000 psychological level last week attracted solid buying by the bulls. This pushed Bitcoin back into the descending triangle triangle pattern on May 28, but the rally to the 50-day SMA attracted triggered profit-taking.
Currently, the bears are fighting to stop the recovery at the resistance line of the triangle at $28,162 embraced by the 50-day SMA. If the bulls do not allow the price to drop below the 100-day SMA at $26,836 – the triangle’s support line, it will enhance the prospects of a break above the resistance line.
If that happens, the Bitcoin price could rise to $30,000 and later revisit the April 14 swing high at $31,035. Such a moev would represent an 11% uptick from the current price.
BTC/USD Daily Chart
Supporting this positive outlook was the position of the Relative Strength Index (RSI) above the midline. The price strength at 53 suggested that there were still more buyers than sellers in the market.
On the downside, Bitcoin was still stuck in the bearish triangle. This means that as long as the price continues to trade within the confines of the triangle, BTC is at risk of a massive drop.
Therefore, the first support to watch out for on the way down would be the 100-day SMA. If this level gives way, it would trigger massive sell orders that would plunge Bitcoin to the vital support zone between $23,300 and $22,840 where the 200-day SMA sits. Such a move would represent a 16% drop from the current levels.
