BTC Bulls Need a Return to $29,500 to Avoid Another Pullback

Key Insights:

• On Saturday, BTC reversed gains from Friday, falling by 2.09% to end the session at $28,909.
• Binance, Ethereum, and Voyager Digital News left BTC and the broader crypto market on the back foot.
• The technical indicators were mixed, signaling a choppy Sunday session.

On Saturday, bitcoin (BTC) fell by 2.09%. Reversing a 2.36% gain from Friday, BTC ended the day at $28,909. Despite the bearish session, BTC struck a week high of $29,847 before hitting reverse.

A bullish start to the day saw BTC strike a first-hour high of $29,847. Falling short of the First Major Resistance Level (R1) at $29,873, BTC fell to a mid-afternoon low of $28,405. BTC fell through the First Major Support Level (S1) at $28,998. However, finding support at the Second Major Support Level (S2) at $28,469, BTC revisited the $29,000 handle before easing back.

US Lawmaker Scrutiny Sends BTC into the Red

It was a quiet Saturday session, with investors continuing to respond to the US Jobs Report.

However, the bullish sentiment failed to extend throughout the session, with US lawmakers and the SEC weighing on investor appetite.

On Friday, news hit the wires of the US Department of Justice investigating Binance for possible breaches of sanctions against Russia. While crypto investors may be able to stomach increased regulatory scrutiny, the discovery of a sanctions breach would give the US administration a solid footing in its anti-crypto agenda.

However, repercussions of a breach could extend beyond the US borders. European investors and regulators may also respond to any findings that Binance facilitated sanction evasion.

Voyager Digital news and regulatory risk added to the bearish mood as investors moved on from the US Jobs Report. Next week, the US CPI Report could refuel bets of a 25-basis point June rate hike and a hard landing.

Closer to home, Ethereum co-founder Vitalik Buterin and the Ethereum Foundation may have contributed to a broad-based crypto sell-off. News of the Ethereum Foundation selling 15,000 ETH in response to Buterin selling just 200 ETH was bearish.

On November 12, 2021, the Ethereum Foundation sold 20,000 ETH. The sale preceded an extended sell-off that bottomed out in June 2022 with a low of $879.80. Just days before the sale, ETH had hit an ATH of $4,868.

The Day Ahead

It is a quiet day ahead, with no US corporate earnings or economic indicators to draw investor interest. The lack of external market forces leaves investors to digest the latest US economic indicators and the Fed’s monetary policy outlook.

However, US lawmakers and regulatory activity will continue to influence, with investors needing to track SEC v Ripple case updates. Binance and Coinbase (COIN)-related news would also move the dial. Both are currently under the US Government spotlight.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.08% to $28,886. A mixed start to the day saw BTC rise to an early high of $28,924 before falling to a low of $28,886.

Technical Indicators

Resistance & Support Levels

BTC needs to move through the $29,054 pivot to target the First Major Resistance Level (R1) at $29,702 and the Saturday high of $29,847. A return to $29,500 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 $30,496 and resistance at $30,500. The Third Major Resistance Level (R3) sits at $31,938.

Failure to move through the pivot would leave the First Major Support Level (S1) at $28,260 in play. However, barring a crypto event-fueled sell-off, BTC should avoid the Second Major Support Level (S2) at $27,612. The Third Major Support Level (S3) sits at $26,170.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was mixed signals. BTC sat below the 50-day EMA ($28,909). The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA, sending mixed signals.

A move through the 50-day EMA ($28,909) would support a breakout from R1 ($29,702) to give the bulls a run at R2 ($30,496) and $30,500. However, a fall through the 100-day EMA ($28,825) would bring the 200-day EMA ($28,483) and S1 ($28,260) into view. A BTC move through the 50-day EMA would send a bullish signal.