Bitcoin dropped more than 5% last week as regulatory uncertainty, risks of a recession, and talks of a possible US debt default kept investors on the edge. The Consumer Price Index rose 4.9% annually in April, which was slightly better than estimates of 5% but the better-than-expected data could not excite investors.

That may be because even after the fall in inflation, it remains way above the Federal Reserve’s 2% target range. Over the next few days, the focus will shift from inflation to debt ceiling talks between the White House and the Congress. While speaking to Bloomberg, JPMorgan Chase CEO Jamie Dimon warned that a sovereign debt default by the US will be “potentially catastrophic” and could affect other markets around the world. He expects the stock market's volatility to increase as the potential default nears.

Bitcoin slipped below $27,000 on May 11 but the bears could not pull the price to $25,000 as we had anticipated in our previous analysis. Buyers aggressively purchased the drop to the support line of the descending channel pattern.

The relief rally reached the 20-day exponential moving average (EMA) on May 15 but the long wick on the day’s candlestick shows that the bears are defending the level aggressively. The downsloping 20-day EMA and the relative strength index (RSI) in the negative territory indicate that bears have the upper hand.

Sellers will again try to pull the price toward the support line but buyers are likely to have other plans. If the bulls drive the price above the 20-day EMA, the BTC/USD pair may rally to the resistance line of the channel. This level may again pose a strong challenge to the bulls. If the price turns down from the resistance line, it will indicate that the pair may extend its stay inside the channel for some more time.

Lastly please check out the advancement’s happening in the cryptocurrency world.

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