BTC/USD Price Analysis – May 29, 2023

Daily Price Outlook

Bitcoin is currently trading at $27,983.81 per BTC/USD, with a market capitalization of $542.52 billion USD. The daily trading volume stands at $15.97 billion. The recent release of US core Personal Consumption Expenditures (PCE) inflation data for April, which exceeded expectations, caused a decline in the price of bitcoin.

The asset briefly dropped below $26,400 as market participants reacted, leading to increased selling pressure. However, the price quickly rebounded to its pre-data level.

Market participants had anticipated interest rate cuts from the US Federal Reserve, but the higher-than-expected US core PCE inflation rate of 0.4% MoM and 4.7% YoY raised expectations of a potential interest rate hike.

The increased selling pressure is expected to delay Bitcoin’s ascent to its target of $30,000. Market conditions for risk assets are not as favorable as traders had anticipated, and further market events could intensify selling pressure on Bitcoin and Ethereum.

Currently, the price of bitcoin is falling, and the publication of US PCE inflation data has added to its volatility. BTC may find support at previous resistance levels of $26,348 and $26,220.

There has been a capital inflow into Bitcoin following the news of an agreement between Republican Kevin McCarthy and US President Joe Biden to raise the country’s debt ceiling. This development has led to a 2% price increase in Bitcoin today.

It aligns with former Wall Street trader Macrojack’s belief that Bitcoin is a valuable asset amid concerns about increased money printing by the Federal Reserve, which negatively impacts the USD but positively affects BTC due to their inverse trading relationship.

BTC/USD Price Chart – Source: Tradingview

BTC/USD – Technical Outlook

Bitcoin is currently facing a significant obstacle at the $28,300 level, which is highlighted by the ‘double tap’ pattern observed on the four-hour timeframe. The repeated candle closures below this level indicate exhaustion among buyers and suggest a possible shift in market control towards sellers.

Key technical indicators, such as the RSI and MACD, are signaling overbought conditions, with the RSI hovering around 76.75 and the MACD showing extended histograms at around 171. Additionally, there is a notable divergence between the 50-day exponential moving average (EMA) at approximately $27,000 and the current market price of Bitcoin, which is close to $28,000. This divergence suggests an overbought market and implies the potential for a price correction.

If Bitcoin fails to break the $28,300 level, there may be an opportunity for investors to short Bitcoin below $28,300, targeting price levels of $27,500 or even $27,000. On the other hand, a successful breach and close above $28,300 could prompt investors to take a long position, with an initial target set at $29,000, and potentially higher towards $29,450.