BTC Eyes Sub-$28,500 as US Crypto Market Faces New Wave of Scrutiny

Key Insights:

• On Wednesday, BTC hit reverse on Binance-related news, falling 1.80% to end the day at $29,260.
• Reports of the US Department of Justice considering fraud charges against Binance sent BTC south.
• The near-term technical indicators turned bearish, signaling a fall to sub-$28,500.

On Wednesday, bitcoin (BTC) fell by 1.80%. Reversing a 1.56% loss from Tuesday, BTC ended the day at $29,260. Significantly, BTC revisited the $30,000 handle for the first time in nine sessions before hitting the reverse.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.02% to $29,255. A range-bound start to the day saw BTC rise to an early high of $29,298 before easing back.

Daily Chart

The Daily Chart showed BTC/USD sitting below the $30,750 – $31,250 resistance band. BTC also sat below the 50-day EMA ($29,445) while holding above the 200-day EMA ($27,098), sending bearish near-term but bullish longer-term price signals. Notably, the 50-day EMA narrowed to the 200-day EMA, signaling further losses.

Looking at the 14-Daily RSI, the 43.67 reading reflects bearish sentiment. The RSI aligns with the 50-day EMA, supporting a return to sub-$28,500. However, a move through the 50-day EMA ($29,445) would give the bulls a run at the $30,750 – $31,250 resistance band.

4-Hourly Chart

Looking at the 4-Hourly Chart, BTC remains below the $30,750 – $31,250 resistance band. BTC sits below the 50-day ($29,449) and 200-day ($29,647) EMAs, sending bearish near and longer-term price signals.

Significantly, the 50-day EMA pulled back from the 200-day EMA, supporting further losses. However, a BTC move through the 50-day ($29,449) and 200-day ($29,647) EMAs would give the bulls a run at the $30,750 – $31,250 resistance band.

The 14-4H RSI reading of 45.53 indicates a bearish stance, with selling pressure outweighing buying pressure. Significantly, the RSI aligns with the EMAs, signaling a return to sub-$28,500.

Talk of US Department of Justice Fraud Charges Against Binance Weighed

Market sentiment turned sour on Wednesday. After responding to the news of MicroStrategy (MSTR) planning to acquire more BTC, Binance-related news sent BTC and the broader market into the red.

The news hit the wires on Wednesday of the US Justice Department considering fraud charges against Binance. Concerns over the impact of charges on Binance leave the DoJ torn between filing charges or imposing a fine or a non-prosecution agreement. Fears of a run and the cost to customers raise the chances of alternative punitive measures.

While the DoJ considers the impact of filing charges against Binance, the possibility of filing charges could lead to a run on the world’s largest exchange.

The Day Ahead

US ISM Non-Manufacturing PMI and Jobless Claims will draw interest this afternoon.

However, beyond the economic calendar, investors should continue to monitor the crypto news wires. SEC v Ripple and SEC v Terraform Lab chatter, ETF updates, and Binance and Coinbase (COIN)-related news will move the dial.