BTC Bulls to Target $30,000 on Renewed US Banking Sector Woes

Key Insights:

• On Tuesday, BTC gained 2.91% to end the session at $28,324.
• US banking sector woes drove demand for BTC and the broader crypto market as investors responded to First Republic Bank troubles.
• However, the technical indicators remain bearish, signaling a return to $25,000.

On Tuesday, bitcoin (BTC) rose by 2.91%. Reversing a 0.33% decline from Monday, BTC ended the day at $28,324.

A bearish start to the day saw BTC fall to a mid-morning low of $27,210. Steering clear of the First Major Support Level (S1) at $26,998, BTC rose to a late high of $28,394. BTC broke through the First Major Resistance Level (R1) at $28,027 to end the session at $28,324.

US Corporate Earnings and Bank Sector Woes Mute Recession Fears

It was a busy Tuesday, with US economic indicators and corporate earnings in focus. After disappointing manufacturing sector numbers on Tuesday, consumer confidence figures sounded the recession bell.

The CB Consumer Confidence Index fell from 104.2 to 101.3 in April versus a forecast of 104.0. In April, the Expectations Index fell from 74.0 to 68.1, while the Present Situation Index rose from 148.9 to 151.1.

Significantly, the Expectations Index remained below 80, signaling a recession within the year. The survey revealed that consumers expect fewer jobs to be available and business conditions to worsen in the next six months.

UPS (UPS) earnings results added to the bearish mood. However, the US banking sector woes and late earnings results from Microsoft (MSFT) and Alphabet Inc. (GOOGL), among others, delivered a bullish end to the session. News of sliding deposits at First Republic Bank (FRC) drove demand for BTC and the broader crypto market.

The stats, corporate earnings, and banking sector woes impacted sentiment toward Fed monetary policy. According to the CME FedWatchTool, the probability of a 25-basis point May interest rate hike fell from 90.5% to 76.1% on Tuesday. Significantly, the chances of a June hike declined from 24.7% to 9.2%, supporting the bullish end to the Tuesday session.

The NASDAQ Composite Index fell by 1.98%, while the NASDAQ mini was up 152 points this morning.

The Day Ahead

It is a busy session. US economic indicators and corporate earnings are in focus.

US core durable goods and trade data will draw interest. A larger-than-expected fall in core durable goods orders would further fuel recession fears. There is no Fed talk for investors to consider. The Fed entered the blackout period on Saturday.

Big names on the US earnings calendar include Meta Platforms (META).

While US economic indicators and corporate earnings will influence, the crypto news wires will remain the focal point. US banking sector chatter, SEC v Ripple case-related updates, and Binance and Coinbase (COIN)-related news will move the dial. Regulatory activity and US lawmaker chatter will also draw interest.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.09% to $28,298. A range-bound start to the day saw BTC rise to an early high of $28,340 before falling to a low of $28,298.

BTC Technical Indicators

Resistance & Support Levels

BTC needs to avoid the $27,976 pivot to target the First Major Resistance Level (R1) at $28,742. A return to $28,500 would signal an extended bullish session. The crypto news wires, US corporate earnings, and core durable goods orders 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 $29,160 and resistance at $29,500. The Third Major Resistance Level (R3) sits at $30,344.

A fall through the pivot would bring the First Major Support Level (S1) at $27,558 into play. However, barring a data-fueled sell-off, BTC should avoid sub-$27,000 and the Second Major Support Level (S2) at $26,792. The Third Major Support Level (S3) sits at $25,608.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was bullish signals. BTC sat above the 50-day EMA ($28,159). The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA widening from the 200-day EMA, sending bullish signals.

A move through the 100-day EMA ($28,463) and R1 ($28,742) would give the bulls a run at R2 ($29,160) and $29,500. However, a fall through the 50-day ($28,159) and 200-day ($28,039) EMAs would bring S1 ($27,558) into view. A fall through the 50-day EMA would send a bearish signal.