BTC and a Run at $28,000 in the Hands of Services PMIs

Key Insights:

• On Sunday, BTC saw green for the second time in the week, rising by 0.18% to end the day at $27,126.
• A lack of economic indicators left BTC in tight range, with no crypto events to move the dial.
• However, the technical indicators remained bearish, leaving sub-$27,000 in play.

On Sunday, bitcoin (BTC) rose by 0.18%. Partially reversing a 0.65% loss from Saturday, BTC ended the week down by 3.45% to $27,126. Significantly, BTC saw green for just the second time in seven sessions.

A bearish start to the day saw BTC fall to an early morning low of $26,963. Steering clear of the First Major Support Level (S1) at $26,887, BTC rallied to a late high of $27,472. BTC broke through the First Major Resistance Level (R1) at $27,303 before easing back to end the day at $27,126.

Hopes of a US Regulatory Framework Delivered Support

It was a quiet end to the week. There were no US economic indicators for investors to consider, leaving BTC in the hands of the crypto news wires.

However, there were also no crypto events to move the dial. Hopes of a shift in the US regulatory landscape provided support following the release of the Digital Asset Market Structure Proposal on Friday.

The draft bill came ahead of the Tuesday US Committee on Agriculture hearing focusing on the spot trading of digital assets. While Republican lawmakers aim to deliver a regulatory framework, the US administration would have to end its anti-crypto campaign and support the draft bill to shift investor sentiment toward the US crypto market.

The Tuesday hearing should give investors an early indication of how receptive the Democrats are to delivering regulatory clarity in the interest of innovation and consumer protection.

The Day Ahead

It is a relatively busy Monday session. This morning, China services and composite PMI numbers will draw interest. BTC continues to react to economic indicators from the US and China. Following the better-than-expected Caixin Manufacturing PMI, a pickup in service sector activity should deliver price support.

However, the US ISM Non-Manufacturing PMI will be the main report of the day. The markets expect a Fed pause in June. A hotter-than-expected PMI could refuel bets on a June interest rate hike. While the headline figure will provide direction, investors should consider the employment, new order, and price sub-components.

SEC and CFTC chatter, SEC v Ripple-related comments, and Binance and Coinbase (COIN)-related news also need consideration.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.10% to $27,099. A bearish start to the day saw BTC fall from an opening price of $27,125 to a low of $27,085.

BTC Technical Indicators

Resistance & Support Levels

BTC needs to move through the $27,187 pivot to target the First Major Resistance Level (R1) at $27,411 and the Sunday high of $27,472. A return to $27,300 would signal an extended bullish session. The crypto news wires and economic indicators 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 $27,696 and resistance at $28,000. The Third Major Resistance Level (R3) sits at $28,205.

Failure to move through the pivot would leave the First Major Support Level (S1) at $26,902 in play. However, barring an event-fueled sell-off, BTC should avoid sub-$26,500. The Second Major Support Level (S2) at $26,678 should limit the downside. The Third Major Support Level (S3) sits at $26,169.

Looking at the EMAs and the 4-hourly candlestick chart (below), the EMAs sent bearish signals. BTC sat below the 50-day EMA ($27,162). The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, sending bearish signals.

A move through the 50-day ($27,162) and 100-day ($27,185) EMAs would support a breakout from the 200-day EMA ($27,367) and R1 ($27,411) and target R2 ($27,696). However, failure to move through the 50-day EMA ($27,162) would leave S1 ($26,902) in view. A move through the 50-day EMA would send a bullish signal.