BTC in a Bear Trap on SEC Chair Gensler-Induced Move Sideways

Key Insights:

• On Friday, BTC moved sideways for the fourth consecutive session, gaining 0.34% to end the day at $29,427.
• Softer US inflation numbers offset uncertainty surrounding the SEC approval of the spot BTC ETFs.
• However, the near-term technical indicators remained bearish, signaling a return to sub-$28,500.

On Friday, bitcoin (BTC) gained 0.34%. Partially reversing a 0.44% loss from Thursday, BTC ended the day at $29,427. Significantly, BTC came up short of $30,000 for the fourth consecutive session.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.06% to $29,443. A range-bound start to the day saw BTC fall to an early low of $29,412 before rising to a high of $29,443.

Daily Chart

The Daily Chart showed BTC/USD sitting below the $30,750 – $31,250 resistance band. BTC also remained below the 50-day EMA ($29,451) while holding above the 200-day EMA ($26,979), sending bearish near-term but bullish longer-term price signals. Notably, the 50-day EMA narrowed on the 200-day EMA, supporting further losses.

Looking at the 14-Daily RSI, the 44.85 reading signaled a bearish outlook. The RSI signals a BTC fall to sub-$28,500 to bring the $27,500 – $26,850 support band into view. However, a move through the 50-day EMA ($29,451) would give the bulls a run at $30,000 and 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 and the 50-day ($29,608) and 200-day ($28,738) EMAs, signaling bearish price momentum.

Significantly, the 50-day EMA pulled further back from the 200-day EMA after the bearish cross, signaling a return to sub-$28,500. However, a BTC move through the 50-day ($29,608) and 200-day ($29,738) EMAs would support a run at the $30,750 – $31,250 resistance band.

The 14-4H RSI reading of 49.17 indicates a moderately bearish stance, with selling pressure outweighing buying pressure. Significantly, the RSI aligns with the 50-day EMA, signaling near-term bearish momentum and a return to sub-$28,500.

Softer US Inflation Numbers Offset Spot BTC ETF Uncertainty

US economic indicators delivered support to riskier assets on Friday. After hotter-than-expected Q2 GDP numbers, softer inflation numbers eased investor fear of a September Fed rate hike.

The US Core PCE Price Index increased by 4.1% year-over-year in June versus 4.6% in May. Economists forecast an increase of 4.2%. Easing bets on a September Fed rate hike supported the soft-landing theory. The US economy expanded by 2.4% in Q2 versus 2.0% in the first quarter, siding with Fed staff expectations the US would avoid a recession.

However, BTC saw a modest gain relative to the NASDAQ Composite Index, which rallied by 1.90%.

Uncertainty surrounding the approval of the spot BTC ETFs likely capped the upside. SEC Chair Gary Gensler fueled investor uncertainty over the likelihood of the SEC approving one, some, or all of the applications after delivering another anti-crypto interview earlier this week.

The SEC Chair had this to say about crypto investing,

“The platforms often are comingling and trading against you and have market makers on the other side of the trades. This is a field rife with fraud, rife with hucksters, and there are good faith actors as well, but there are far too many that aren’t.”

The Day Ahead

With no US economic indicators to influence, SEC v Ripple chatter, ETF updates, and Binance and Coinbase (COIN)-related news continue to draw interest.

However, investors should monitor the crypto news wires for SEC and US lawmaker chatter. Progress toward delivering a regulatory framework for the US digital asset space should provide price support.

Republican Bill Huizenga shared the latest from Capitol Hill, saying,

“This week, the House Committee on Financial Services passed two bipartisan pieces of legislation that will provide clarity to the digital asset ecosystem. Leaving it up to regulators such as the SEC and maintaining the status quo is insufficient. Congratulations to Patrick McHenry for this historic achievement.”