BTC in Retreat with Bears Eying a Near-Term Return to Sub-$20,000

Key Insights:

• On Saturday, BTC fell by 2.38% to end the day at $25,871.
• Binance-related news continued to grip the markets as other regulators turned on the platform following the US SEC lawsuit.
• The technical indicators remain bearish, signaling a return to sub-$20,000.

On Saturday, bitcoin (BTC) fell by 2.38%. Following a 0.09% decline on Friday, BTC ended the day at $25,871. Significantly, BTC ended the day at sub-$26,000 for the first time since March 16.

A choppy start to the day saw BTC rise to an early morning high of $26,556 before hitting reverse. Falling short of the First Major Resistance Level (R1) at $25,861, BTC fell to a late afternoon low of $25,393. BTC fell through the Major Support Levels before moving through S3 ($25,532) to end the day at $25,871.

Investors Turn Bearish on BTC and the Crypto Market

Binance continued to grab the crypto news headlines on Saturday. On Friday, SEC Nigeria issued a circular warning that Binance Nigeria Limited is neither registered nor regulated. Investors dealing with the platform do so at their own risk.

The circular went on to say,

“By this circular, Binance Nigeria Limited is hereby directed to immediately stop soliciting Nigerian investors in any form whatsoever.”

The SEC Nigeria move likely alarmed investors, as regulators in other jurisdictions may follow suit.

Binance CEO CZ shared the latest stats on Saturday. According to the Binance CEO,

• Outflows totaled $392 million over the last 24 hours.
• In November 2022, Binance processed $7 billion of net outflows in one day.
• CZ also pointed out that some third-party analytics firms consider the change in assets under management (AUM) as outflows. Change in AUM includes price drops.

The Day Ahead

It should be another quiet session on Sunday. With no US economic indicators to draw interest, investors should track the crypto news wires for further fallout from the SEC moves against Binance and Coinbase (COIN).

Following the news from Nigeria, reports of other regulators targeting Binance would weigh on investor sentiment.

However, investors should also monitor SEC activity, SEC v Ripple, SEC v Binance, and SEC v Coinbase (COIN)-related news and US lawmaker chatter.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.27% to $26,430. A mixed start to the day saw BTC rise to an early high of $25,879 before falling to a low of $25,797.

BTC Technical Indicators

Resistance & Support Levels

BTC needs to move through the $25,940 pivot to target the First Major Resistance Level (R1) at $26,487 and the Saturday high of $26,556. A return to $26,000 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 $27,103. The Third Major Resistance Level (R3) sits at $28,266.

Failure to move through the pivot would leave the First Major Support Level (S1) at $25,324 in play. However, barring an event-fueled sell-off, BTC should avoid sub-$24,500. The Second Major Support Level (S2) at $24,777 should limit the downside. The Third Major Support Level (S3) sits at $23,614.

Looking at the EMAs and the 4-hourly candlestick chart (below), the EMAs sent bearish signals. BTC sat below the 50-day EMA ($26,478). The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, sending bearish signals.

A move through the 50-day EMA ($26,478) and R1 ($26,487) would give the bulls a run at 100-day ($26,728) and the 200-day ($27,046) EMAs and R2 ($27,103). However, failure to move through the 50-day EMA ($26,478) would leave S1 ($25,324) and sub-$25,000 in view. A move through the 50-day EMA would send a bullish signal.