BTC Bears to Target Sub-$27,000 on Binance and Recession Jitters

Key Insights:

• On Monday, BTC kick-started the week with a 2.75% fall to end the session at $27,701.
• Binance and the news of Bittrex filing for Chapter 11 left BTC and the broader crypto market in the red.
• The technical indicators were bearish, signaling a return to sub-$27,000.

On Monday, bitcoin (BTC) fell by 2.75%. Following a 1.47% loss on Sunday, BTC ended the day at $27,701. Significantly, BTC ended the day at sub-$28,000 for the first time since April 24.

A bullish start to the day saw BTC strike a first-hour high of $28,686 before hitting reverse. Falling short of the First Major Resistance Level (R1) at $28,962, BTC fell to a late-session low of $27,309. BTC fell through the First Major Support Level (S1) at $28,232 and the Second Major Support Level (S2) at $27,980 to end the day at $27,701.

Binance and the News of Bittrex Filing for Chapter 11 Weighed

It was a busier Monday session, with the crypto news wires weighing on investor sentiment.

News of Binance suffering bitcoin congestion issues sent BTC and the broader crypto market into the red. On Sunday, Binance announced the temporary suspension of BTC withdrawals, saying,

“We’ve temporarily closed BTC withdrawals as the Bitcoin network is experiencing a congestion issue. Our team is currently working on a fix until the network is stabilized and will reopen BTC withdrawals as soon as possible. Rest assured funds are SAFU.”

While Binance cited Bitcoin network congestion issues as the reason for suspending withdrawals, OKX made the following statement,

“BTC deposit and withdrawal services on OKX are running fine. On-chain transaction fee is currently high but our transactions are going through fine.”

News of Bittrex.US filing for Chapter 11 in the US was also bearish. Overnight, Bittrex announced the decision to file Chapter 11 bankruptcy.

Bittrex had this to say about customer funds,

“For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole.”

Bittrex.US plans to request the Court to activate such accounts as soon as possible to allow affected customers to withdraw their funds.

There were no US economic indicators to influence, leading to a BTC decoupling from the NASDAQ Composite Index. On Monday, the NASDAQ Composite Index gained 0.18%, with investors awaiting the all-important US CPI Report.

Easing banking sector jitters supported the US equity markets while weighing on BTC and the broader crypto market.

The Day Ahead

It is another quiet day ahead. There are no US economic indicators to draw investor interest this afternoon. The lack of economic indicators will leave corporate earnings and Fed chatter to influence.

However, US lawmakers and regulatory activity will remain a focal point. Investors should track SEC v Ripple case updates, with a Court ruling likely to have a material impact. Binance and Coinbase (COIN)-related news will also move the dial.

Further suspensions of BTC withdrawals would be a bearish price scenario.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.05% to $27,688. A bearish start to the day saw BTC fall from an opening price of $27,701 to a low of $27,688.

Technical Indicators

Resistance & Support Levels

BTC needs to move through the $27,899 pivot to target the First Major Resistance Level (R1) at $28,488 and the Monday high of $28,686. A return to $28,000 would signal an extended bullish session. The crypto news wires should be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $29,276 and resistance at $29,500. The Third Major Resistance Level (R3) sits at $30,653.

Failure to move through the pivot would leave the First Major Support Level (S1) at $27,111 in play. However, barring another crypto event-fueled sell-off, BTC should avoid sub-$26,500. The Second Major Support Level (S2) at $26,522 should limit the downside. The Third Major Support Level (S3) sits at $25,145.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was bearish signals. BTC sat below the 200-day EMA ($28,456). The 50-day EMA closed in on the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, sending bearish signals.

A move through the 200-day EMA ($28,456) and R1 ($28,488) would give the bulls a run at the 50-day ($28,636) and 100-day ($28,697) EMAs. However, failure to move through the 200-day EMA ($28,456) would leave S1 ($27,111) and sub-$27,000 in view. A BTC move through the 50-day EMA would send a bullish signal.