BTC Bulls to Target $30,000 as Safe-Haven Status Strengthens

Key Insights:

• It was a bullish Friday session, with BTC surging 9.14% to end the day at $27,351.
• BTC decoupled from a bearish NASDAQ Composite Index as investors responded to a growing crisis within the US banking sector.
• Technical indicators are bullish, with $30,000 in view.

On Friday, bitcoin (BTC) jumped by 9.14%. Following a 3.04% gain on Thursday, BTC ended the day at $27,351. Significantly, BTC revisited the $27,000 handle for the first time since June 2022.

A mixed start to the day saw BTC fall to an early low of $24,954. Steering clear of the First Major Support Level (S1) at $24,427, BTC surged to a final-hour high of $27,563. BTC broke through the Major Resistance Levels to end the day at $27,351.

Growing US Banking Crisis and Fed Bailouts Drives BTC Demand

The receding Silicon Valley Bank and Signature Bank (SBNY) contagion was short-lived. On Friday, news hit the wires of SV Financial Group (SIVB), the listed former parent company of Silicon Valley Bank, filing for bankruptcy protection.

According to the filing, the Group has approximately $2.2 billion in liquidity and around $3.3 billion in aggregate principal amount of unsecured notes.

The news of SV Financial Group filing for bankruptcy protection coincided with reports of First Republic Bank receiving a bailout from 11 banks to prevent a fourth US bank from collapsing. There were also reports of banks borrowing a record high of $164.8 billion from two Fed facilities.

Alarmingly, the previous high was $111 billion during the 2008 global financial crisis. The reports were enough to drive demand for BTC as investors diluted exposure risks to the banking sector.

US economic indicators took a back seat, with disappointing consumer sentiment figures failing to curtail the BTC rally. According to prelim figures, the Michigan Consumer Sentiment Index fell from 67.0 to 63.4 versus a forecasted 66.9.

The NASDAQ Composite Index fell by 0.74%, with the Dow and S&P 500 seeing losses of 1.19% and 1.10%, respectively.

The Day Ahead

There were no external market forces to influence investor sentiment. With the US markets closed, profit-taking is likely as investors consider what is next for the US banking sector. The markets expect the Fed to deliver a 25-basis point rate hike despite the Fed-induced banking crisis. However, the markets expect a rate cut before the end of the year.

As the crypto market digests the events from the week, investors should continue to monitor Binance and FTX news and updates from the ongoing SEC v Ripple case.

Regulators and US lawmakers could intensify the scrutiny of the digital asset space to direct attention away from the banking sector woes. The US administration and regulators may feel aggrieved in how BTC has performed this week considering the Fed bailouts.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.03% to $27,359. A choppy start to the day saw BTC fall to an early low of $27,004 before rising to a high of $27,452.

Technical Indicators

BTC needs to avoid the $26,623 pivot to target the First Major Resistance Level (R1) at $28,291. A move through the Friday high of $27,563 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 $29,232 and resistance at $30,000. The Third Major Resistance Level (R3) sits at $31,841.

A fall through the pivot would bring the First Major Support Level (S1) at $25,682 into play. However, barring a crypto event-fueled crypto sell-off, BTC should avoid sub-$25,000 and the Second Major Support Level (S2) at $24,014.

The Third Major Support Level (S3) sits at $21,405.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($24,149). The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA moving away from the 200-day EMA, sending bullish signals.

A hold above S1 ($25,682) and the 50-day EMA ($24,149) would support a breakout from R1 ($28,291) to target R2 ($29,232) and $30,000. However, a fall through S1 ($25,682) would bring the 50-day EMA ($24,149) and S2 ($24,014) into view. A fall through the 50-day EMA would send a bearish signal.