Decentral Block Post

Bitcoin’s price broke below its 55-day resistance at $27,000 on May 12, down 12.3% in 30 days. But more importantly, it decoupled from the S&P 500 Index, which is basically flat from 30 days ago and 15% below its all-time high.

As the chart indicates, for some reason, Bitcoin (BTC) investors believe that the favorable macroeconomic trends for risk markets were overshadowed by the increasing risk perception of the cryptocurrency sector.

Financial crisis could fuel Bitcoin’s price increase

For starters, there’s the impending United States government debt ceiling crisis, which, according to U.S. Treasury Secretary Janet Yellen, could cause an “economic and financial catastrophe." The increased risk of default should, in theory, be beneficial for scarce assets, as investors seek shelter from a weaker U.S. dollar.

The $5.6 trillion commercial real estate market in the U.S. is subject to additional risks due to high interest rates and troubled regional banks. Guggenheim Partners chief investment officer Anne Walsh stated, “We’re likely going into a real estate recession, but not across the entire real estate market."

There is also positive news on the cryptocurrency regulatory front, as the industry gathers additional support against the regulatory efforts of the U.S. Securities and Exchange Commission (SEC). The U.S. Chamber of Commerce filed an amicus brief on May 9, defending the Coinbase exchange and accusing the SEC of deliberately creating a precarious and uncertain landscape.

Bitcoin saw five-day highs on May 15 as a rebound continued after the Wall Street open.

$40,000 “still a magnet” for BTC price

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching $27,666 on Bitstamp.

Bitcoin (BTC) on Bitstamp held strength on hourly timeframes after a weekly close just below the $27,000 mark.

With United States equities in a tight range on the day, crypto analysts looked for cues over where markets might go next.

For Michaël van de Poppe, founder and CEO of trading firm Eight, the outlook was good.

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.