BTC Bulls to Retarget $31,500 on ETF News and US Inflation

Key Insights:

• On Thursday, BTC bounced back from the Wednesday pullback, gaining 1.16% to end the day at $30,533.
• News of Fidelity filing for a spot Bitcoin ETF offset the influence of US economic indicators on Fed monetary policy bets.
• The technical indicators remain bullish, signaling a return to $32,500.

On Thursday, bitcoin (BTC) rose by 1.16%. Partially reversing a 1.91% loss from Wednesday, BTC ended the day at $30,533. Significantly, BTC came up short of the $31,000 handle for the second consecutive session.

A bearish start to the day saw BTC fall to a first-hour low of $30,133. Steering clear of the First Major Support Level (S1) at $29,830, BTC rose to an early afternoon high of $30,857. BTC broke through the First Major Resistance Level (R1) at $30,665 before easing back to end the day at $30,533.

Fidelity Trumped US Data-Fueled Bets on Consecutive Fed Hikes

It was a busy Thursday session on the US economic calendar. Better-than-expected Q1 GDP numbers and a fall in the US jobless claims fueled bets on a July Fed rate hike and a September move.

According to finalized numbers, the US economy expanded by 2.0% in Q1 versus 2.6% in Q4 and a prelim 1.3%. US initial jobless claims were also Fed-friendly, falling from 265k to 239k. Economists forecast claims to increase to 266k.

After Fed Chair Powell’s hawkish comments and the US economic indicators from Thursday, the markets cemented a July rate hike ahead of today’s inflation numbers. Investors also raised their bets on a September move.

According to the CME FedWatch Tool, the probability of a 25-basis point July Fed rate hike stood at 89.3% versus 81.8% on Wednesday. Significantly, the chances of the Fed lifting rates to 5.75% in September stood at 26.8%, up from 16.4% on Wednesday.

Despite the hawkish sentiment, the NASDAQ Composite Index ended the day flat.

In contrast, the crypto news wires provided much-needed support. News of Fidelity filing for a spot Bitcoin Exchange-Traded Fund (ETF) was the key to the bullish session.

Cboe BZX Exchange refiled the request to seek approval for the Wise Origin Bitcoin Trust. Previously, the SEC turned down the Fidelity proposal. More requests are likely after the SEC approval of the Volatility Shares Trust 2x Bitcoin Strategy ETF.

Ahead of the Fidelity filing, Blackrock Inc. (BLK) was another big name to file for a spot Bitcoin ETF.

The Day Ahead

It is a busy Friday, with the US Core PCE Price Index and personal income numbers likely to decide the Fed’s near-term monetary policy moves. After hawkish US economic indicators on Thursday, sticky inflation would cement a July move and raise the bets on a September move.

While hawkish Fed bets tend to be BTC-negative, hopes of the US avoiding a recession should cushion the impact of a more hawkish Fed.

Beyond the US economic calendar, investors should monitor the crypto news wires for SEC v Ripple chatter. Coinbase (COIN) and Binance-related news will need continued monitoring.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.03% to $30,524. A bearish start to the day saw BTC fall from an early high of $30,534 to a low of $30,507.

BTC Technical Indicators

Looking at the EMAs and the 4-hourly candlestick chart (below), the EMAs sent bullish signals. BTC sat above the 50-day EMA ($30,032). The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, sending bullish signals.

A hold above S1 ($30,158) and the 50-day EMA ($30,032) would support a move through R1 ($30,882) to give the bulls a run at R2 ($31,232). However, a fall through S1 ($30,158) and the 50-day EMA ($30,032) would bring S2 ($29,784) into view. A fall through the 50-day EMA would send a bearish signal.

Resistance & Support Levels