It is a busy day ahead for BTC. The Federal Reserve, the US banking sector, and the US Government debt ceiling will be focal points today.
On Tuesday, bitcoin (BTC) rose by 2.06%. Partially reversing a 3.94% loss from Monday, BTC ended the day at $28,679. Despite the bullish session, BTC fell short of the $29,000 handle for the first time in seven sessions.
A bearish start to the day saw BTC fall to an early morning low of $27,901. Steering clear of the First Major Support Level (S1) at $27,413, BTC rose to an early evening high of $28,888. However, falling short of the First Major Resistance Level (R1) at $29,068, BTC eased back to end the day at $28,679.
It was a relatively busy Tuesday session, with US economic indicators and the banking sector in focus. Weaker-than-expected JOLTs job openings supported an afternoon breakout.
JOLT’s Job Openings fell from 9.974 million to 9.590 million. While the rate of quits was reportedly little changed at 2.5%, the number of quits in the accommodation and food services industry fell by 178,000, a signal of deteriorating sector conditions.
The weaker JOLTs job openings led to a shift in sentiment toward the Fed policy outlook.
According to the CME FedWatch Tool, the probability of a 25-basis point May interest rate hike fell from 93.2% to 88.7% in 24 hours. Significantly, the chances of a 25-basis point June interest rate hike fell from 27.7% to 0.50%.
Banking sector woes supported the bullish BTC session, with US regional banks under pressure over fears of a more sinister banking crisis. Failure to resolve the US debt ceiling also weighed on riskier assets, with the NASDAQ Composite Index ending Tuesday with a 1.08% loss.
It is a busy Tuesday session. US ISM Non-Manufacturing PMI and ADP nonfarm employment change figures will influence the early afternoon session. Following the disappointing JOLTs job openings, weak labor market numbers would ease bets of a hawkish Fed interest rate hike.
Late in the afternoon, the Fed will be in focus. The markets expect a 25-basis point interest rate hike, leaving forward guidance to move the dial. Barring a surprise decision, Fed plans to deliver another 25-basis point hike in June would be a bearish scenario.
While the Federal Reserve and economic indicators will influence, investors should track SEC v Ripple case updates and Binance and Coinbase (COIN)-related news.
However, regulatory activity and US lawmaker chatter will also move the dial.
This morning, BTC was down 0.30% to $28,593. A mixed start to the day saw BTC rise to an early high of $28,694 before falling to a low of $28,539.
Resistance & Support Levels
R1 – $ | 29,078 | S1 – $ | 28,091 |
R2 – $ | 29,476 | S2 – $ | 27,502 |
R3 – $ | 30,463 | S3 – $ | 26,515 |
BTC needs to avoid the $28,489 pivot to target the First Major Resistance Level (R1) at $29,078. A move through the Tuesday high of $28,888 would signal an extended bullish session. The crypto news wires and the Fed 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 $29,476 and resistance at $30,000. The Third Major Resistance Level (R3) sits at $30,463.
A fall through the pivot would bring the First Major Support Level (S1) at $28,091 into play. However, barring a crypto event-fueled sell-off, BTC should avoid sub-$27,500. The Second Major Support Level (S2) at $27,502 should limit the downside. The Third Major Support Level (S3) sits at $26,515.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was bullish signals. BTC sat below the 50-day EMA ($28,689). The 50-day EMA converged on the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, sending bullish signals.
A bullish cross of the 50-day EMA through the 100-day EMA would support a breakout from R1 ($29,078) to give the bulls a run at R2 ($29,476) and $30,000. However, a fall through the 200-day EMA ($28,337) would bring S1 ($28,091) and sub-$28,000 Support Levels into view. A move through the 50-day ($28,689) and 100-day ($28,698) EMAs would send a bullish signal.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.