Bitcoin price has been consolidating for the past few days as the cryptocurrency market fails to sustain the bullish momentum. The asset has been under intense pressure for the past few days amid US debt ceiling talks and the Federal Reserve’s monetary policy outlook.
Bitcoin price was changing hands at $27,000 on Friday as investors watch out for the highly anticipated speech by Fed chair Jerome Powell. The digital currency has been under intense pressure for the past few days in the wake of a stronger US dollar and a potential interest rate hike by the US Federal Reserve.
The US dollar nearly jumped to a six-month high against the Japanese Yen during Asia/Pacific trading session on Friday as optimism over the US debt ceiling debate raised expectations of a higher interest rate hike in June. Additionally, data suggesting a still-tight labor market in the past week reinforced the expectations that the Federal Reserve would hike interest rates in a bid to tame inflation.
Two Fed policymakers said on Thursday that the current economic data does not justify a pause in the Fed’s interest rate hike campaign. Money markets are now pricing in a 39% chance the Fed will raise its funds rate by 25 basis points in June. Notably, the European Central Bank (ECB) also announced that it will raise its interest rates further to meet its 2% inflation goal.
Federal Reserve chair Jerome Powell said on Friday that the after-effects of the banking crisis could mean that interest rates do not have to be too high to control inflation. Markets and officials are debating whether more rate increases are needed to lower inflation.
Bitcoin Price Analysis
Bitcoin price has been hovering slightly above its crucial support level of $26,500 as bulls struggle to regain bullish momentum. At the time of writing, BTC was trading at $26,897.34. The digital asset has managed to move above the 50-day exponential moving average but remains below the 200-day EMA. Its Relative Strength Index (RSI) has remained below the neutral zone, suggesting an increase in selling pressure. The Moving Average Convergence Divergence (MACD) indicator exhibits a bearish outlook.
Therefore, the Bitcoin price is likely to extend its current consolidation trend as it struggles to find direction amid global market turmoil. A move below the important support level of $26,500 will have bears pushing the asset lower to $25,265.50. On the other hand, a move above the key resistance level of $28,000 might give bulls momentum to push the price higher.