The debt ceiling talks remain in focus and are likely to dictate the price action in the S&P 500, DXY and cryptocurrency markets in the near term.
The debt ceiling negotiations in the United States are keeping traders on the edge. JPMorgan Chase CEO Jamie Dimon recently told Bloomberg on May 11 that a possible sovereign default by the U.S. government could create panic in the stock markets, resulting in heightened volatility.
The next big question troubling crypto investors is how will Bitcoin react to such an event. Bloomberg’s latest Markets Live Pulse survey indicates that Bitcoin (BTC) could be the third most preferred asset class behind Gold and U.S. Treasuries should the U.S. government fail to prevent a debt default.
Billionaire fund manager Paul Tudor Jones told CNBC that he is holding his Bitcoin and will always have some portion of his portfolio in it.
What are the important support and resistance levels to watch for in the S&P 500 Index (SPX), Bitcoin, and the major altcoins? Let’s study the charts to find out.
S&P 500 Index price analysis
The S&P 500 Index has been trading near the 20-day exponential moving average (4,118) for the past few days. This suggests a tough battle between the bulls and the bears for supremacy in the near term.
The gradually rising 20-day EMA and the relative strength index (RSI) near the midpoint suggest a range-bound action in the short term. The index could swing between the overhead resistance of 4,200 and the 50-day simple moving average (4,059) for a few more days.
A break and close below the 50-day SMA could pull the price to the uptrend line. If this support also gives way, the index may nosedive to 3,800.
On the upside, the bulls will have to clear the hurdle at 4,200. The index may then rally to 4,325 where the bears will again pose a strong challenge. During the correction from this level, if buyers flip 4,200 into support, it will enhance the prospects of a rally above 4,325.
U.S. dollar index price analysis
After being unsuccessful for a few days, the bulls finally managed to push and sustain the U.S. dollar index (DXY) above the 20-day EMA (101.88) on May 11.
The bulls continued their buying and cleared the overhead hurdle at the 50-day SMA (102.47) on May 12. The 20-day EMA has started to turn up gradually and the RSI has jumped into the positive zone, indicating that bulls have a slight edge. The index could rise to 103.50 in the short term where it is again likely to face selling from the bears.
Conversely, if the price turns down and slips below the 20-day EMA, it will suggest that the break above the 50-day SMA may have been a bull trap. The index could then retest the vital support at 100.82. A break and close below this level will complete a bearish head and shoulders (H&S) pattern which may start a downward move to 97.50.
Bitcoin price analysis
The bulls are trying to force Bitcoin back into the symmetrical triangle pattern, suggesting strong buying at lower levels.
The relief rally is likely to face strong selling at the moving averages and again at the resistance line of the triangle. If the price turns down from the overhead resistance, the bears will make another attempt to sink the BTC/USDT pair to $25,250.
This is an important level to keep an eye on because if it cracks, the selling could intensify and the pair may plunge to $20,000.
On the upside, the bulls will have to surmount the resistance line to indicate the start of a new up-move. The pair may first rise to $31,000 and later attempt a break above $32,400.
Ether price analysis
Ether (ETH) turned up from the 50% Fibonacci retracement level of $1,754 on May 12 and after a couple of days of consolidation, the bulls have pushed the price to the 20-day EMA ($1,854).
The bears will try to guard the support line with vigor and flip it into resistance. If they can pull it off, it will signal that higher levels are attracting sellers. The ETH/USDT pair could then retest the immediate support at $1,740. A break and close below this level could tug the price down to the 61.8% Fibonacci retracement level of $1,663.
If bulls want to prevent the decline, they will have to drive the price above the 50-day SMA ($1,883). The pair could then rally to the psychologically crucial level of $2,000.
BNB price analysis
The bulls have pushed BNB (BNB) to the moving averages, indicating that the $300 level is proving to be a strong support.
A break and close above the moving averages will clear the path for a potential rise to the overhead resistance at $338. This level may prove to be a strong barrier but if bulls overcome it, the BNB/USDT pair could rally to $350.
Alternatively, if the price turns down from the moving averages, it will suggest that the bears have not given up. They will then again try to yank the price below $300. If they do that, the pair could slide to the next support at $280.
XRP price analysis
XRP (XRP) has been trading below $0.43 for the past few days but a minor positive in favor of the bulls is that they have not allowed the bears to extend the decline further.
The bulls will try to take advantage of the situation and kick the price above $0.43. That could stretch the recovery to the resistance line where the bears will again try to defend the level. The bulls will have to overcome this obstacle to start a rally to $0.48 and then to $0.54.
Another possibility is that the price turns down from the current level and breaks below $0.40. That will signal the resumption of the down move. The XRP/USDT pair may then tumble to $0.36.
Cardano price analysis
Cardano’s (ADA) recovery has reached the 20-day EMA ($0.37), which is an important level to keep an eye on in the near term.
If buyers shove the price above the 20-day EMA, it will suggest that the sentiment remains positive and traders are buying on dips. The ADA/USDT pair may then rise toward the neckline of the inverse H&S pattern.
If the price turns down from the neckline, it will indicate that the pair may oscillate between the neckline and the uptrend line for a few more days. A break and close below the uptrend line will indicate that bears have seized control. The pair may then slump to $0.30.
Related: Why is Litecoin price up today?
Dogecoin price analysis
The bulls have successfully guarded the $0.07 support level in Dogecoin (DOGE) for the past few days indicating solid demand at lower levels.
The relief rally is likely to face resistance near the moving averages. If the price turns down from the overhead resistance, it will suggest that demand dries up at higher levels. That will embolden the bears who may then again attempt to sink the DOGE/USDT pair below $0.07. If they manage to do that, the pair could slide to $0.06.
If bulls want to prevent a fall below $0.07, they will have to push the price above the 50-day SMA ($0.08). The pair could then rally to the $0.10 to $0.11 resistance zone.
Solana price analysis
Solana’s (SOL) rebound off the strong support at $19.85 is nearing the downtrend line. This is likely to act as a strong hurdle for the bulls in the near term.
The moving averages are flattening out and the RSI is near the midpoint, indicating that the selling pressure could be reducing. If buyers propel the price above the downtrend line, the SOL/USDT pair will attempt a rally to $24.
Contrarily, if the price once again turns down from the downtrend line, it will suggest that the bears are in no mood to relent. The pair could then remain stuck between the downtrend line and $19.85 for some more time.
Polygon price analysis
Polygon (MATIC) is attempting to start a recovery that is likely to reach the breakdown level of $0.94. The bears are expected to mount a strong defense at this level.
If the price turns down from $0.94, it will suggest that the bears have flipped this level into resistance. They will then try to strengthen their position further by pulling the MATIC/USDT pair below $0.81. If they succeed, it will open the doors for a potential decline to $0.69.
Contrary to this assumption, if buyers drive the price above $0.94, it will signal strong buying at lower levels. The pair may first rise to the 50-day SMA ($1.03) and thereafter attempt a rally to the resistance line.
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.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.