The price of Bitcoin (BTC) remained unchanged on May 18 compared to the previous day’s close, as traders awaited further clarity on the impending debt crisis in the United States.
Bitcoin sees slight gains as market sentiment increases
On May 17, U.S. President Joe Biden expressed his confidence in settling the impasse with Republicans to prevent a default, which boosted the market sentiment. Consequently, Bitcoin rose by 1.5%, reaching over $27,400 on that day.
Moreover, Bitcoin’s recovery may have gained momentum following Tether’s announcement to use 15% of its monthly operational profits to buy Bitcoin.
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Overall, the price of Bitcoin has increased by 65% year-to-date, but it is still down by 60% from its all-time high of $69,000 in November 2021.
Bitcoin’s price must overcome a stronger dollar
Bitcoin is at risk of dipping in May due to a series of strong economic data released by the U.S. earlier this week, which has reignited speculation of a June interest rate hike.
For instance, the country’s industrial output increased by 0.5% in April, surpassing the expected growth of 0.1%, and following two months of stagnation. Meanwhile, retail sales rose by 0.4% in April after a 0.7% decrease in the previous month. This indicates that consumer spending held up well, despite facing economic hurdles.
The prospect of another rate hike resulted in an increase in U.S. Treasury yields, which in turn, strengthened demand for the U.S. dollar.
If the U.S. dollar index enters a new bullish phase, Bitcoin, which usually trades inversely to the greenback, will be at risk of depreciation.
BTC price technicals indicate bearishness
Bitcoin’s price chart technicals also indicate a bearish target of $25,000, a significant psychological price level, by June.
Related: Watch these BTC price levels as Bitcoin threatens to lose $27K support
The bears argue that Bitcoin is experiencing a strong selling pressure from its 50-day exponential moving average (50-day EMA; the red wave) near $27,670. Therefore, a pullback from there would position BTC/USD for a drop towards its 200-day EMA (the blue wave) near $24,860.
However, a move above Bitcoin’s 50-day EMA could invalidate the bearish setup and set BTC price on course towards $30,000 by June.
Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.