BTC Bulls to Target $31,500 as Momentum Mutes the SEC Effect

Key Insights:

• BTC ended the Friday session flat but avoided sub-$30,000 for the first time since May 2022.
• Bank earnings, US economic indicators, and Fed chatter delivered mixed sentiment, with investors brushing aside SEC activity.
• The technical indicators remain bullish, signaling a run to $35,000.

On Friday, bitcoin (BTC) rose by 0.24%. Following a 1.71% gain on Thursday, BTC ended the day at $30,462. BTC struck a new 2023 high while avoiding sub-$30,000 for the first time since May 2022.

A bullish start to the day saw BTC rise to a mid-morning high of $30,968. BTC broke through the First Major Resistance Level (R1) at $30,679. However, coming up against the Second Major Resistance Level (R2) at $30,969, BTC slid to a late afternoon low of $30,001. Steering clear of the First Major Support Level (S1) at $29,983, BTC found late support to wrap up the day at $30,462.

Market Momentum Mutes SEC Activity and Fed Chatter

It was a busy Friday session, with US bank earnings, US economic indicators, Fed chatter, and SEC activity drawing investor attention.

On the US economic calendar, retail sales figures weighed on investor sentiment. In March, retail sales slid by 1.0% versus a forecasted 0.4% decline. Better-than-expected industrial production and consumer sentiment figures failed to support a recovery.

Hawkish Fed chatter contributed to the afternoon reversal, with FOMC member Christopher Waller calling for more rate hikes to bring inflation to target. Waller had this to say,

“Monetary policy needs to be tightened further. How much further will depend on incoming data on inflation, the real economy, and the extent of tightening credit conditions.”

Waller’s comments moved the dial, with the probability of a 25-basis point Fed rate hike in May surging from 67.0% to 83.4%, according to the CME FedWatchTool.

The disappointing retail sales figures and Waller’s forward guidance overshadowed bank earnings results, with Blackrock (BLK), Citi (C), JPMorgan (JPM), and Wells Fargo (WFC) beating earnings forecasts.

The NASDAQ Composite Index responded to the hawkish Fed chatter, falling by 0.35%, with the S&P 500 and Dow seeing losses of 0.21% and 0.42%, respectively.

Crypto market news was also bearish, with the SEC targeting the DeFi space. On Friday, the SEC was back in the spotlight, issuing a press release, reopening the comment period on proposed changes to the definition of exchange, targeting the DeFi space.

Gary Gensler wrote,

“Make no mistake, many crypto trading platforms already come under the current definition of an exchange and thus have an existing duty to comply with the securities laws.”

However, crypto advocate and SEC commissioner Hester Peirce had different ideas. In an official SEC statement, Peirce said,

“Rather than embracing the promise of new technology as we have done in the past, here we propose to embrace stagnation, force centralization, urge expatriation, and welcome extinction of new technology. Accordingly, I dissent.”

The influences of the SEC press release and the dissent were evident in the afternoon session.

The Day Ahead

Updates from the SEC v Ripple case and Binance and Coinbase-related news will need consideration. However, barring a Court ruling from the SEC v Ripple case, regulatory activity, US lawmaker commentary, and Fed chatter will move the dial.

On April 18, SEC Chair Gary Gensler will give testimony at a digital assets sub-committee hearing on Capitol Hill. The latest SEC move to widen its net across the digital asset space may raise eyebrows ahead of the hearing.

However, we expect BTC price sensitivity to further SEC activity despite the increased scrutiny of the SEC’s regulation by enforcement mantra.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.12% to $30,424. A bearish start to the day saw BTC fall from an opening price of $30,462 to a low of $30,424.

BTC Technical Indicators

BTC needs to move through the $30,477 pivot to target the First Major Resistance Level (R1) at $30,953 and the Friday high of $30,968. A return to $30,750 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 $31,444 and resistance at $31,500. The Third Major Resistance Level (R3) sits at $32,411.

Failure to move through the pivot would leave the First Major Support Level (S1) at $29,986 in play. However, barring an event-fueled sell-off, BTC should avoid the Second Major Support Level (S2) at $29,510. The Third Major Support Level (S3) sits at $28,543.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($29,493). The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA. The EMAs send bullish signals.

A hold above the Major Support Levels and the 50-day EMA ($29,493) would support a breakout from R1 ($30,953) to target R2 ($31,444) and $31,500. However, a fall through S1 ($29,986) would bring S2 ($29,510) and the 50-day EMA ($29,493) into view. A fall through the 50-day EMA would send a bearish signal.