BTC Faces the Risk of Sub-$27,500 on Regulatory Risk and the Fed

Key Insights:

• BTC had a mixed Saturday session, recovering from a session low of $27,833 to end the day up 0.04% to $ 27,901.
• Further reaction to the US Jobs Report from Friday pegged BTC back from a breakout session.
• The technical indicators remain mixed, signaling a testy Sunday session.

On Saturday, bitcoin (BTC) rose by 0.04%. Partially reversing a 0.46% loss from Thursday, BTC ended the day at $27,901. BTC failed to hold onto the $28,000 handle for the second time in five sessions.

A mixed start to the day saw BTC rise to an early morning high of $28,151. BTC briefly broke through the First Major Resistance Level (R1) at $28,063 before falling to a late afternoon low of $27,833. However, steering clear of the First Major Support Level (S1) at $27,735, BTC retested resistance at $28,000 before easing back.

Rising Bets of a Fed Interest Rate Hike Leaves BTC at Sub-$28,000

The US Jobs Report continued to influence investor sentiment toward the Fed, with the fall in the US unemployment rate fueling bets of a 25-basis point interest rate hike in May.

According to the CEM FedWatch Tool, the probability of a 25-basis point interest rate hike jumped from 49.2% (Fri) to 71.2% on Saturday.

However, the SEC and CFTC were silent because of the US holidays. While the SEC and CFTC were silent, regulatory uncertainty and anti-crypto sentiment on Capitol Hill continued to leave BTC at sub-$30,000.

The Day Ahead

In the final hour, the NASDAQ mini will influence. A quiet Saturday left investors to consider the impact of the US Jobs Report on the Fed and the global economy.

However, investors should track the crypto news wires for SEC and CFTC-related news. US lawmaker chatter will also continue to influence.

Updates from the ongoing SEC v Ripple case and Binance and Coinbase (COIN)-related news will move the dial.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.02% to $27,896. A range-bound start to the day saw BTC rise to an early high of $27,909 before falling to a low of $27,892.

Technical Indicators

BTC needs to move through the $27,962 pivot to target the First Major Resistance Level (R1) at $28,090 and the Saturday high of $28,151. A return to $28,000 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 $28,280 and resistance at $28,500. The Third Major Resistance Level (R3) sits at $28,598.

Failure to move through the pivot would leave the First Major Support Level (S1) at $27,772 in play. However, barring a risk-off-fueled sell-off, BTC should avoid sub-$27,500. The Second Major Support Level (S2) at $27,644 should limit the downside. The Third Major Support Level (S3) sits at $27,326.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a mixed signal. BTC sat above the 100-day EMA ($27,676). The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA, sending mixed signals.

A move through the 50-day EMA ($28,009) would support a breakout from R1 ($28,090) to target R2 ($28,280) and $28,500. However, a fall through S1 ($27,772) would bring the 100-day EMA ($27,676) and S2 ($27,644) into view. A move through the 50-day EMA would send a bullish signal.