Bitcoin surpassed $27,000 on May 16 and traders remained eager for the upside to continue. At this point, however, the “gap” in CME futures drew attention. Here are the details…
Bitcoin could drop to $24,000: Here’s why
The data showed that BTC/USD was still focused on the $27,000 level, dropping to $26,870 after the daily close. Still lacking a certain direction, traders thought the pair would try to break out of its narrow range. Another possibility was that they hoped the coin would touch more significant levels up or down. Potential targets for popular trader Crypto Ed included the “gap” created in weekend CME futures.
In his last YouTube update of the day, Ed said, “It’s really in a shorter time frame where the action is right now. The wider timeframe is not really exciting,” he summarized. The downside CME gap is between $26,500 and $26,800, just below the overnight lows. Crypto Ed points to the possibility of a bounce back to BTC/USD high ranges of $28,800 after the gap is filled. But he went on to say that a downside “possibility” leaves $24,000 in play.
What are others saying about Bitcoin’s direction?
Other market participants were equally cautious. Trader Jackis described Bitcoin as “very hard to read” under current conditions. In his Twitter analysis of the day, he concluded, “My personal view is that we’re going to have weekly continuity and daily problems.” Therefore, despite the current pullback, the chances of higher highs remained on the weekly timeframes. Jackis said the following:
It is important to note that the weekly structure remains bullish and if there is a pullback from here or deeper, there is a potential “Higher Low” in an uptrend that should lead to a break of $31,000 until proven otherwise.
Top-down analysis on BTC May 16th 🧵 – 1/5
WEEKLY:
Important to note, that the weekly structure remains bullish & that whether from here or should any deeper pullback come is a potential HL in a bullish trend which should lead to a break of 31K until proven otherwise pic.twitter.com/ldXrEuDlq7— JACKIS (@i_am_jackis) May 16, 2023
Analyst warns of ‘debt ceiling’ volatility
On the other hand, macro evaluations gradually started to point to the debt ceiling crisis in the USA. Trader Skew suggested that the markets are starting to feel the pressure as June 1 is fast approaching for the potential default. In a tweet about the US Dollar Index (DXY), Skew said, “There is lackluster price action, primarily due to the US debt ceiling becoming a possible crisis. However, the deadline of June 1 is approaching,” he said. Also, Skew said the following:
These results will be what the big funds are eyeing towards the end of May. We expect volatility to increase and liquidity to decrease in the coming weeks, especially during the deadline period.
Lack luster price action primarily due to US debt ceiling becoming a probable crisis
however getting closer to the June 1 deadline
Implications will be what big funds are eyeballing into late may (raised or suspended)
Expect heightened volatility & waning liquidity in… https://t.co/3yWzGuba1v
— Skew Δ (@52kskew) May 16, 2023
Inversely correlated with BTC price performance, DXY continued its bearish trend after weekly gains. cryptocoin.comAs we have announced, the main macro event of the week will be the statement to the public on May 19 by FED Chairman Jerome Powell.
