BTC Eyes Sub-$19,500 on US Jobs Report and President Biden News

sKey Insights:

• It was a bearish Thursday session, with BTC tumbling by 6.13% to end the day at $20,381.
• Silvergate Bank news and US President Joe Biden’s US Budget sent BTC and the broader crypto market into the deep red.
• Technical indicators are bearish, with sub-$20,000 in view.

On Thursday, bitcoin (BTC) tumbled by 6.13%. Following a 2.23% slide on Wednesday, BTC ended the day at $20,381. BTC wrapped up the day at sub-$21,000 for the first time since January 18.

A mixed start to the day saw BTC rise to an early high of $21,836. Coming up short of the First Major Resistance Level (R1) at $22,130, BTC slid to a late Thursday low of $20,086. BTC fell through the Major Support Levels to end the day at $20,086.

US President Joe Biden and Silvergate Bank Sink Bitcoin (BTC)

It was a bearish Thursday session for riskier assets. Economic data from the US took a backseat, with a larger-than-expected rise in US Jobless Claims unable to ease Fed Fear ahead of the US Jobs Report.

US initial jobless claims increased from 190k to 211k versus a forecasted rise to 195k. Following the hotter-than-expected ADP and JOLTs job openings, investor jitters left the NASDAQ Composite Index down 2.05% on Thursday.

Banking sector woes added to the market stress as investors responded to the news of SVB Financial Group (SIVB) announcing a $1.75 billion share sale to support its balance sheet and tackle the impact of falling deposits.

The NASDAQ mini was down 32.25 points this morning.

While Fed Fear and banking woes weighed on investor sentiment, the crypto news wires had the final say.

Further investor reaction to the collapse of Silvergate Bank and US President Joe Biden’s crypto tax plans weighed on the broader crypto market.

On Thursday, the White House targeted crypto miners, with Biden announcing plans to end a crypto tax strategy in his 2024 budget. According to the announcement, the White House plans to save $24 billion by removing a crypto tax subsidy relating to crypto-related transactions.

According to the announcement,

“A crypto investor – unlike an investor in stocks or bonds – can sell a cryptocurrency at a loss, take a substantial tax loss to reduce their tax burden, and then buy back that same cryptocurrency the very next day.”

The administration would save the estimated $24 billion by applying tax rules akin to bonds and securities.

The Day Ahead

It is a big day ahead for the global financial markets, with the US Jobs Report in the spotlight. Another jump in nonfarm payrolls and a fall the unemployment would fuel bets of a more aggressive interest rate trajectory.

We expect the numbers to have a material impact on the NASDAQ and broader crypto market.

Beyond the US economic calendar, crypto news events will continue testing sentiment with regulatory activity and lawmaker chatter the market focal points. Binance, FTX, and Silvergate Bank updates and news from the ongoing SEC v Ripple case need monitoring.

Bitcoin (BTC) Price Action

This morning, BTC was down 1.15% to $20,146. A bearish start to the day saw BTC fall from an early high of $20,382 to a low of $20,070.

Technical Indicators

BTC needs to move through the $20,768 pivot to target the First Major Resistance Level (R1) at $21,449 and the Thursday high of $21,836. A return to $21,500 would signal a bullish session. The crypto news wires and US economic indicators 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 $22,518. The Third Major Resistance Level (R3) sits at $24,268.

Failure to move through the pivot would leave the First Major Support Level (S1) at $19,699 in play. However, barring a crypto event-fueled crypto sell-off, BTC should avoid sub-$19,000. The Second Major Support Level (S2) at $19,018 should limit the downside.

The Third Major Support Level (S3) sits at $17,268.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat below the 50-day EMA ($22,215). The 50-day EMA pulled back from the 200-day EMA, with the 100-day EMA crossing through the 200-day EMA, delivering bearish signals.

A move through R1 ($21,449) would give the bulls a run at the 50-day EMA ($22,215) and R2 ($22,518). A move through the 50-day EMA would send a bullish signal. However, failure to move through the 50-day EMA ($21,215) would leave the Major Support Levels in play.