BTC Bulls in Limbo on Hopes of a Fed Pause and SEC Activity

Key Insights:

• On Monday, BTC slipped by 0.08% to end the day at $25,933.
• Investor caution ahead of the US CPI Report and Fed interest rate decision left BTC in a tight range.
• The technical indicators remain bearish, signaling a return to sub-$25,000.

On Monday, bitcoin (BTC) slipped by 0.08%. Partially reversing a 0.32% gain from Sunday, BTC ended the day at $25,933. Significantly, BTC ended the day at sub-$26,000 for the third consecutive session.

A bearish start to the day saw BTC fall to an early morning low of $25,632. BTC fell through the First Major Resistance Level (R1) at $25,670 before rising to a late morning high of $26,125. However, falling short of the First Major Resistance Level (R1) at $26,235, BTC eased back to end the week at $25,933.

SEC v Binance News and US Lawmaker Chatter Leave BTC Flat

It was a quiet start to the week. There were no US economic indicators for investors to consider. The lack of economic indicators left BTC in the hands of the crypto news wires.

Republican lawmakers were back in action on Monday, with US lawmaker Warren Davidson saying,

“Today, I filed the SEC Stabilization Act to restructure the SEC and fire Gary Gensler. US capital markets must be protected from a tyrannical Chairman, including the current one. It’s time for real reform and to fire Gary Gensler as Chair of the SEC.”

The SEC Stabilization Act comes after the release of the Digital Asset Market Structure Draft Bill and comments from Senator Cynthia Lummis on regulatory reform.

While Republican lawmakers continue to push for crypto regulatory reforms, Democratic Party support for digital assets would go against the US administration’s anti-crypto position.

SEC v Binance chatter also drew interest. According to the news wires, Binance US added former SEC enforcement division George Canellos to its defense team.

John Reed Stark, a former SEC chief, shared his views on the Binance legal team, saying,

“Binance and CZ just added a uniquely qualified criminal defense all-star lawyer to their legal team: George Canellos, former Chief of Major Crimes unit in the US Attorney’s Office for the Southern District of New York and former head of the SEC’s New York Office and former SEC Enforcement Division Co-Director.”

Stark concluded,

“Binance is clearly preparing for a criminal prosecution and continuing to hire the best defense attorneys in the world. But I doubt even Ironman, Captain America, and the Hulk could get Binance out from their current perilous legal quagmire.”

US Inflation and Fed Jitters Kept BTC in Tight Ranges

While the crypto news wires drew interest, investor caution was evident ahead of the US CPI Report today and the Fed interest rate decision on Wednesday.

A hotter-than-expected US CPI Report would refuel bets on a hawkish Fed interest rate hike on Wednesday and raise the prospects of a hard landing.

Investor angst over the SEC moves against Binance and Coinbase (COIN) added to the bearish mood, leaving BTC in the red for the day.

In contrast, the US equity markets enjoyed a bullish start to the week. The NASDAQ Composite Index gained 1.53%, with the Dow and S&P 500 ending the day up by 0.56% and 0.93%, respectively.

The Day Ahead

It is a busy Tuesday. The US CPI Report will garner interest this afternoon and influence the Fed interest rate decision and projections.

While the CPI Report will impact, the SEC will release unredacted versions of the William Hinman speech-related documents. The heavily anticipated speech-related documents could materially influence the direction of the SEC v Ripple case and give Democratic party members a reason to support the SEC Stabilization Act.

Ripple CEO had this to say about the speech-related documents,

“Wish I could go in depth now, but we’ve waited this long (18+ months), I don’t want to overstep… suffice to say Stuart Alderoty and I believe they were well worth the wait.”

A Ripple victory against the SEC should materially shift investor sentiment toward the SEC cases against Binance and Coinbase.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.17% to $25,978. A bullish start to the day saw BTC rise from an early low of $25,913 to a high of $26,044 before easing back.

BTC Technical Indicators

Resistance & Support Levels

BTC needs to avoid the $25,897 pivot to target the First Major Resistance Level (R1) at $26,161. A move through the Monday high of $26,125 would signal an extended bullish session. The crypto news wires and US CPI Report 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 $26,390 and resistance at $26,500. The Third Major Resistance Level (R3) sits at $26,883.

A fall through the pivot would bring the First Major Support Level (S1) at $25,668 into play. However, barring an event-fueled sell-off, BTC should avoid sub-$25,000. The Second Major Support Level (S2) at $25,404 should limit the downside. The Third Major Support Level (S3) sits at $24,911.

Looking at the EMAs and the 4-hourly candlestick chart (below), the EMAs sent bearish signals. BTC sat below the 50-day EMA ($26,254). The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, sending bearish signals.

A move through R1 ($26,161) would give the bulls a run at the 50-day EMA ($26,254) and R2 ($26,390). However, failure to move through the 50-day EMA ($26,254) would leave S1 ($25,668) in view. A move through the 50-day EMA would send a bullish signal.