Bitcoin has paused on its rallying after skyrocketing by about 13.27% on Sunday. The rise was the market’s reaction to Elon Musk’s tweet that Tesla will soon resume its acceptance of the digital currency as a mode of payment. According to Tesla’s CEO, this will happen when Bitcoin mining begins using cleaner energy.
The tweet was in response to Cointelegraph’s report. The report cited Sygnia’s Magda Wierzycka who indicated that the US Securities and Exchange Commission should have investigated Musk’s recent tweets regarding the digital currency. In February, Tesla’s decision to purchase Bitcoin worth $1.5 billion boosted the crypto. In March, the company announced its inclusion of Bitcoin as a mode of payment. However, two months later, it suspended the practice citing environmental concerns.
As the week unfolds, Bitcoin will also be reacting to the Fed interest rate decision expected on Wednesday. Investors will be keen on whether the Fed continues with its accommodative stance. A hawkish tone will be a bearish catalyst for crypto. This is founded on the fact that higher interest rates create a negative environment for riskier assets such as cryptocurrencies.
BTC/USD technical outlook
Bitcoin has eased after extending Sunday’s gains. At the time of writing, the crypto was down by 0.29% at 38907.01. Earlier on, it hit an intraday high of 39,880.76 after surging from 34,784.55 on Sunday. On a two-hour chart, it remains above the 25 and 50-day exponential moving averages.
I expect Bitcoin to find support at 38,344.21, which has been a key resistance-turn-support level in the current year. If the bears manage to push the price past that level, the next target will be along the 25-day EMA at 36,893.42. On the flip side, more buyers may enter the market, pushing the crypto to the psychological level of 40,000. Above that level, the target will be May’s highs of 41,011.23 and 42,607.37.