Why Bitcoin is stuck below $28,000 resistance
On May 23’s episode of The Market Report, analyst and writer Marcel Pechman discusses why Bitcoin (BTC) is stuck near $27,000 and how the macroeconomic scenario has become more critical than ever for an eventual breakout. Plus, the show dissects what United States President Joe Biden has been saying about crypto traders being wealthy tax cheaters.
The first news article shows that the most significant price movements tend to occur after periods of low volatility, as traders tend to get overconfident and add leverage. That creates a perfect storm for a decisive breakout, so, ultimately, stop-loss orders and liquidations further boost the price swing.
Pechman does not believe the U.S. Federal Reserve decision on June 14 will be the trigger everyone expects because it’s relatively priced in that the current 5% rate will be maintained. In his 20-year trading experience, Pechman says those events tend to come out of nowhere.
The show dissects what Biden has been saying about wealthy crypto traders cheating on their taxes. The alleged protections for crypto traders refer to tax-loss harvesting — a strategy investors use to reduce their overall tax liabilities.
According to Pechman, tax-loss harvesting is nothing new and is relatively common in the stock, mutual fund, and commodities markets. There are no grounds for Biden’s baseless differentiation of asset classes, and Pechman does not believe the U.S. president is in a bargaining position right now, with less than 10 days to go before a potential debt default.
The show’s third and final article covers the speculation of an imminent Bitcoin breakout toward $29,000. The recent sideways price movement is eerily similar to early April when Bitcoin’s 12-hour chart ranged between $27,800 and $28,700 for 11 days.
However, Pechman reveals little similarity between the early April bullish breakout and the current status of the Bitcoin futures premium and options risk metric. The bottom line? This time is different, which doesn’t mean bulls can’t get ahead; it’s just less likely according to those metrics.
Don’t miss out! The show is available exclusively on the Cointelegraph Markets & Research YouTube channel.