BTC Bears Target Sub-$29,000 on ETF and Fed Fear

Key Insights:

• BTC saw red on Friday, falling 0.18% to end the day at $29,880.
• ARK Invest ETF-related news and US inflation numbers left BTC on the defensive.
• However, the near-term technical indicators remain bullish, signaling a return to $31,500.

On Friday, bitcoin (BTC) slipped by 0.18%. After a 0.85% decline on Thursday, BTC wrapped the day at $29,880. Significantly, BTC failed to hold onto the $30,000 handle for the second consecutive session.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.06% to $29,863. A bearish start to the day saw BTC fall from an opening price of $29,881 to a low of $29,863.

Daily Chart

The Daily Chart showed BTC sitting below the $30,750 – $31,250 resistance band. However, BTC sat above the 50-day ($29,568) and 200-day ($27,334) EMAs, sending bullish near and longer-term price signals. Notably, the 50-day EMA widened from the 200-day EMA, signaling further gains.

Looking at the 14-Daily RSI, the 51.71 reading reflects bullish sentiment. The RSI signals a breakout from the $30,750 – $31,250 resistance band to target $31,500. However, a fall through the 50-day EMA would bring sub-$28,500 and the $27,500 – $26,850 support band into view.

4-Hourly Chart

Looking at the 4-Hourly Chart, BTC remains below the $30,750 – $31,250 resistance band. However, BTC sits above the 50-day ($29,789) and 200-day ($29,685) EMAs, sending bullish near and longer-term price signals.

Significantly, the 50-day EMA pulled away from the 200-day EMA after the Wednesday bullish cross, a bullish signal. A hold above the 50-day EMA would support a breakout from the $30,750 – $31,250 resistance band to target $31,500. However, a BTC fall through the EMAs would bring sub-$28,500 and the $27,500 – $26,850 support band into view.

The 14-4H RSI reading of 49.07 indicates a moderately bearish stance, with selling pressure outweighing buying pressure. Significantly, the RSI signals a fall through the EMAs to bring sub-$28,500 and the $27,500 – $26,850 support band into play.

ARK Invest ETF News and US Producer Prices Leave BTC in Red Numbers

It was a busy Friday session, with the SEC leaving BTC and the broader market in negative territory.

On Friday, the SEC turned to the public for comment on the ARK Invest spot BTC ETF application, dashing hopes of an August approval. The additional review process gives the SEC 21 more days to approve or disapprove the application.

According to the SEC filing (page 82),

“The Commission asks that commenters address the sufficiency of the Exchange’s statements in support of the proposal, which are set forth in Amendment No. 3, in addition to any other comments they may wish to submit about the proposed rule change, as modified by Amendment No. 3. In particular, the Commission seeks comments on the following questions and asks commenters to submit data where appropriate to support their views.”

The SEC asked for commenters’ views on market manipulation and whether a surveillance sharing agreement with Coinbase would be ‘helpful in detecting, investigating, and deterring fraud and manipulation in the Commodity-Based Trust Shares.’

ARK Invest CEO Cathie Wood spoke earlier this week on the likelihood of the SEC extending the review process, limiting the impact of the news on BTC and the broader market.

In the afternoon session, US producer price index (PPI) numbers weighed on BTC and the broader market. The hotter-than-expected PPI figures for July leave the door ajar for a September Fed rate hike. Significantly, further rate hikes would likely reignite recessionary jitters, a bearish price scenario.

The influence of the US numbers on BTC was evident, with BTC tracking the NASDAQ Composite Index through the afternoon for the second consecutive session.

The Day Ahead

SEC v Ripple-related chatter, ETF updates, and Binance and Coinbase (COIN)-related news will move the dial.

However, US lawmaker chatter and SEC activity would also need consideration.