BTC in the Need of US Lawmaker Intervention to Target $29,000

Key Insights:

• On Saturday, BTC ended a three-day losing streak, rising by 1.98% to end the day at $27,826.
• There were no crypto events to move the dial, leaving dip buyers to deliver support.
• However, the technical indicators are bearish, signaling a return to $25,000.

On Saturday, bitcoin (BTC) rose by 1.98%. Partially reversing a 3.40% fall from Friday, BTC ended the day at $27,826. Significantly, BTC fell short of the $28,000 handle for the first time since March 28.

A mixed start to the day saw BTC fall to an early low of $27,163. Steering clear of the First Major Support Level (S1) at $26,834, BTC rose to a final-hour high of $27,885. However, falling short of the First Major Resistance Level (R1) at $28,060, BTC eased back to end the day at $27,826.

Dip Buyers Brush Aside Fed Fear and Recession Jitters

There were no crypto events or external market drivers to influence on Saturday, leaving dip buyers to deliver support.

Investor sentiment toward the European Parliamentary votes on two MiCA legislations was bullish. However, anti-crypto movements on Capitol Hill and Fed Fear capped the upside on more hawkish Fed bets.

According to the CME FedWatchTool, the probability of a 25-basis point Fed rate hike in May is 89.1% versus 78.0% one week ago. Significantly, the chances of a 25-basis point Fed interest rate hike in June have climbed from 16.6% to 23.4% over the week.

Fed staff currently forecast a mild recession in late 2023. However, a more aggressive Fed interest rate trajectory could deliver a hard landing, a bearish BTC price scenario.

The Day Ahead

There are no US economic indicators to influence, leaving the crypto news wires to provide direction.

SEC v Ripple case-related chatter and Binance and Coinbase (COIN)-related news will influence. Regulatory activity and US lawmaker chatter will also draw interest.

Following the European Parliament vote on MiCA, Capitol Hill may feel the heat to address the current US regulatory landscape and the SEC’s regulation by-enforcement mantra.

In the final hour, the NASDAQ mini will also influence. It is a busy week ahead on the US economic and earnings calendars, with US GDP and inflation figures likely to dictate the Fed’s near-term policy moves.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.96% to $27,560. A bearish start to the day saw BTC fall from an opening price of $27,827 to a low of $27,442.

BTC Technical Indicators

Resistance & Support Levels

BTC needs to move through the $27,625 pivot to target the First Major Resistance Level (R1) at $28,086. A move through the Saturday high of $27,885 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 $28,347. The Third Major Resistance Level (R3) sits at $29,069.

Failure to move through the pivot would leave the First Major Support Level (S1) at $27,364 in play. However, barring another data-fueled sell-off, BTC should avoid sub-$26,500. The Second Major Support Level (S2) at $26,903 should limit the downside. The Third Major Support Level (S3) sits at $26,181.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was bearish signals. BTC sat below the 200-day EMA ($28,126). After the Saturday bearish cross, the 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, sending bearish signals.

A move through R1 ($28,086) and the 200-day EMA ($28,126) would give the bulls a run at R2 ($28,347), and the 50-day ($28,734) and 100-day ($28,835) EMAs. A breakout from the 50-day EMA would bring R3 ($29,069) into play. However, failure to move through the 200-day EMA (28,126) would leave S1 ($27,364) and sub-$27,000 in view. A move through the 50-day EMA would send a bullish signal.