The ongoing US debt ceiling negotiations are causing investors to sit on the sidelines. JPMorgan Chase CEO Jamie Dimon told Bloomberg on May 11th that concerns over a US government default could create market panic and increase volatility in the stock market.
The next big question that has crypto investors concerned is how Bitcoin will react to such an event. Bloomberg's latest poll indicates that Bitcoin (BTC) could be the third-favorite asset after gold and US Treasury bonds if the US government fails to prevent a default.
Billionaire fund manager Paul Tudor Jones told CNBC that he holds Bitcoin and will always have a portion of his investment portfolio in it.
What are the important support and resistance levels to watch for in the S&P 500 (SPX), Bitcoin, and major altcoins? Let's study the charts to find out.
SPX technical analysis
The S&P 500 (SPX) has been trading near the 20-day EMA at 4,118 for the past few days. This indicates a fierce battle between the bulls and bears for supremacy in the short term.
The rising 20-day EMA and the relative strength index (RSI) near the mid-point suggest range-bound action in the near term. The index may oscillate between the resistance level at 4,200 and the 50-day simple moving average (SMA) at 4,059 for the next few days.
A breakdown and close below the 50-day SMA could pull the price down to the uptrend line. If this support also breaks down, the index could plummet to 3,800.
On the flip side, the bulls will have to cross the resistance barrier at 4,200. After that, the index could rise to 4,325, where the bears will once again pose a strong challenge. During the correction from this level, if buyers turn 4,200 into support, it will increase the prospects of a rally to 4,325.
Technical Analysis of DXY:
After several failed attempts, the bulls finally managed to push and maintain the US Dollar Index (DXY) above the 20-day EMA (101.88) on May 11.
The bulls continued to buy and broke above the resistance at the 50-day SMA (102.47) on May 12. The 20-day EMA has started to rise, and the RSI jumped into the positive zone, indicating that the bulls have an advantage. The index could rise to 103.50 in the short term, where it is likely to face selling pressure from the bears again.
On the other hand, if the price falls and slides below the 20-day EMA, it indicates that the breakout above the 50-day SMA could be a false breakout. The index could then retest the important support level at 100.82. Breaking and closing below this level would complete a head and shoulders (H&S) bearish pattern and could start moving down to 97.50.
Technical Analysis of BTC
The bulls are attempting to push Bitcoin back into the symmetrical triangle pattern, indicating strong buying pressure at lower levels.
The relief rally could face stiff selling at the moving averages and again at the resistance line of the triangle. If the price turns down from the resistance, the bears will make another attempt to sink the BTC/USDT pair to $25,250.
This is an important level to watch because if it breaks down, selling could intensify and the pair may drop to $20,000.
On the contrary, the bulls will have to scale the overhead resistance to signal the start of a new uptrend. Firstly, the pair could rise to $31,000 and then attempt to rise above $32,400.
ETH Technical Analysis
Ether (ETH) bounced back from the 50% Fibonacci retracement level at $1,754 on May 12th, and after a few days of consolidation, the bulls pushed the price above the 20-day EMA ($1,854).
The sellers will try to defend this EMA strongly and turn it into a resistance level. If they succeed, it will indicate that higher levels are attracting selling. The ETH/USDT pair could then retest the nearest support at $1,740. Breaking below and closing below this level could pull the price down to the 61.8% Fibonacci retracement level at $1,663.
If the bulls want to prevent the decline, they will have to push the price above the 50-day SMA ($1,883). After that, this pair could rise to the psychologically important level of $2,000.
Technical analysis of BNB
The bulls have pushed BNB (BNB) to the moving averages, indicating that the $300 level is a strong support level.
Breaking out and closing above the moving averages will clear the way for a potential increase to resistance at $338. This level may be a strong barrier, but if the bulls break through it, the BNB/USDT pair could rise to $350.
Alternatively, if the price falls from the moving averages, it shows that the bears are still not giving up. They will then try to push the price down below $300. If they do so, this cryptocurrency pair could slide down to the next support level at $280.