BTC Bears Eye Sub-$30,000 as Investors Ignore the US CPI Report

Key Insights:

• On Wednesday, BTC fell by 0.74% to end the day at $30,487.
• SEC Chair Gensler and the US Government movement of Silk Road BTC weighed.
• However, the technical indicators remained bullish, signaling a run at $32,000.

On Wednesday, bitcoin (BTC) fell by 0.74%. Partially reversing a 0.81% gain from Tuesday, BTC ended the day at $30,487. Despite the bearish session, BTC avoided sub-$30,000 for the fifth consecutive session.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.23% to $30,415. A mixed start to the day saw BTC rise to an early high of $30,545 before falling to a low of $30,399.

Daily Chart

The Daily Chart showed BTC/USD test resistance at the upper level of the $30,750 – $31,250 resistance band before falling through the lower level of the $30,750 – $31,250 resistance band to end the day at sub-$30,500.

However, BTC/USD remained above the 50-day ($29,100) and 200-day ($26,471) EMAs, signaling bullish momentum over the near and long term.

Notably, the 50-day EMA continued to pull away from the 200-day EMA and reflected bullish momentum.

Looking at the 14-Daily RSI, the 57.20 reading signaled a bullish outlook and aligned with the 50-day and 200-day EMAs, supporting another run at the $30,750 – $31,250 resistance band to test resistance at $31,500.

4-Hourly Chart

Looking at the 4-Hourly Chart, the BTC/USD faces strong resistance at the $31,000 psychological level. BTC/USD sits below the 50-day ($30,508) and 200-day ($29,525) EMAs, sending bearish near and longer-term signals.

Significantly, the 50-day EMA narrowed on the 200-day EMA, signaling a fall to sub-$30,000 to bring the 200-day EMA ($29,525) into play. However, a move through the 50-day EMA ($30,508) would support a breakout from the resistance band to target $31,500.

The 14-4H RSI reading of 46.75 indicates a moderately bearish stance and aligns with the 50-day EMA, with selling pressure outweighing buying pressure. Significantly, the RSI signals near-term bearish momentum and a return to sub-$30,000.

SEC Chair Gary Gensler and the US Government Send BTC South

On Wednesday, news hit the wires of the US Justice Department shifting approximately $300 million worth of BTC in several transactions.

The BTC is likely part of the Silk Road seizure, where the US Government seized 51,680.33 BTC. Silk Road was an online ‘darknet’ black market where BTC was the only form of payment. In March, the US Government disclosed the sale of 9,861 BTC and plans to offload 41,491 BTC in four batches over the remainder of 2023.

SEC Chair Gary Gensler added to the bearish mood with comments about the crypto space and the lack of regulatory oversight. Gensler also reacted to calls to recuse himself from the crypto industry after sweeping statements, classifying all cryptos (except BTC) as securities, saying,

“I take an oath, along with my fellow commissioners, to enforce the law that Congress passed and how the courts interpret it. It really comes down to protecting the investing public and looking through the facts and the circumstances of each of the individual tokens and the platforms themselves.”

The SEC Chair also discussed the lack of risk management to address wash trading but did not comment on the latest BTC ETF applications. However, the comments were negative enough to cast doubt on the SEC approving one, some, or all of the BTC ETF applications.

News of US lawmakers introducing a new crypto bill to deliver a regulatory framework failed to impress.

On Wednesday, Senator Cynthia Lummis announced the bill, saying,

“Today, Senator Gillibrand and I are reintroducing landmark legislation to create a federal regulatory framework that allows crypto business and investors to prosper here in America while protecting consumers from bad actors.”

The Lummis-Gillibrand Responsible Financial Innovation Act of 2023 Fact Sheet outlined the framework.

The Day Ahead

It is a busy Thursday session on the US economic calendar. US wholesale inflation and jobless claims will draw interest. However, the numbers would need to fuel hawkish Fed bets to move the dial. On Wednesday, investors brushed aside the US CPI Report that eased expectations of a September Fed interest rate hike.

Beyond the US economic calendar, investors should track ETF chatter, with Binance and SEC v Ripple-related news likely to also be focal points.