BTC and a Return to $28,500 in the Hands of the US Job Report

Key Insights:

• BTC had a bearish Thursday session, falling to a session low of $27,717 before retaking the $28,000 handle.
• Global regulatory and lawmaker activity weighed on BTC and the broader crypto market.
• However, the technical indicators remain bullish, with $30,000 in view.

On Thursday, bitcoin (BTC) fell by 0.48%. After a flat Wednesday session, BTC ended the day at $28,019.

Bearish throughout the morning, BTC fell from an early morning high of $28,153 to a late morning low of $27,717. However, finding support at the First Major Support Level (S1) at $27,720, BTC rose to a mid-afternoon high of $28,164. Falling short of the First Major Resistance Level (R1) at $28,693, BTC eased back to end the day in the red.

US Lawmaker Chatter and Regulatory Activity Tested Buyer Appetite

It was a busy Thursday, with US lawmakers turning to the DeFi space. On Thursday, the US Department of the Treasury targeted illicit activity with the ‘Illicit Finance Risk-Assessment of Decentralized Finance.’

The Treasury Department paper listed the Democratic People’s Republic of Korea (DPRK), cybercriminals, ransomware attacks, thieves, and scammers as ‘actors’ using DeFi services to launder dirty money. Beyond highlighting illicit activity and bad actors, the Treasury Department study included recommendations for US government action, including strengthening US AML/CFT regulatory supervision.

The latest paper follows calls from the Biden administration to ramp up crypto scrutiny.

Binance was in the news again, with the Australian Securities and Investment Commission (ASIC) revoking its Australian derivatives license.

Binance CEO CZ had this to say,

“There are some misinformation (and confusion) about Binance Australia. Binance_Aus requested to cancel the derivatives license yesterday. The platform had exactly 104 users as of yesterday. Binance_AUS will CONTINUE to operate the spot exchange in AU.”

US economic indicators and hawkish Fed chatter added to the bearish mood. Initial jobless claims fell from 246k to 228k versus a forecasted 220k. Significantly, the previous week’s figure was a revision from 198k.

FOMC member James Bullard said,

“We’ve got a long ways to go, and I think inflation is going to be sticky going forward. It’s going to be difficult to get inflation back down to the 2% target… so we are going to have to stay at it in order to apply pressure to make sure inflation gets back down.”

Despite the hawkish chatter, the fall in jobless claims supported the US equity markets. The NASDAQ Composite Index rose by 0.76% on Thursday.

The Day Ahead

Later today, the US Jobs Report will influence the afternoon session. It is a double-edged sword for riskier assets. Weak numbers could further fuel recessionary fears, while hotter-than-expected numbers would raise expectations of another Fed interest rate hike to tackle sticky inflation.

Away from the US economic calendar, regulatory activity and lawmaker chatter will 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 $28,014. A range-bound start to the day saw BTC fall to an early low of $28,008.

BTC Technical Indicators

BTC needs to avoid the $27,967 pivot to target the First Major Resistance Level (R1) at $28,216. A move through the Thursday high of $28,164 would signal an extended bullish session. The US economic indicators and 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 $28,415 and resistance at $28,500. The Third Major Resistance Level (R3) sits at $28,861.

A fall through the pivot would bring the First Major Support Level (S1) at $27,769 into play. However, barring a risk-off-fueled sell-off, BTC should avoid sub-$27,500. The Second Major Support Level (S2) at $27,520 should limit the downside. The Third Major Support Level (S3) sits at $27,073.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a mixed signal. BTC sat above the 100-day EMA ($27,608). 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 ($28,061) would support a breakout from R1 ($28,216) to target R2 ($28,414) and $28,500. However, a fall through S1 ($27,769) would bring the 100-day EMA ($27,608) and S2 ($27,520) into view. A move through the 50-day EMA would send a bullish signal.