BTC Bears to Target Sub-$27,500 on US Recession Fears

Key Insights:

• BTC had a choppy Wednesday session, falling to a session low of $27,828 before recovering to end the day flat.
• US economic indicators fueled recession fears, leaving the NASDAQ Composite Index in the red and BTC on the back foot.
• However, the technical indicators remain bullish, with $30,000 in view.

On Wednesday, bitcoin (BTC) recovered from session losses, ending the day flat at $28,153. BTC rose by 1.29% on Tuesday.

A bullish start to the day saw BTC rally to an early morning high of $28,801. BTC broke through the First Major Resistance Level (R1) at $28,512, BTC before sliding to a late low of $27,828. However, steering clear of the First Major Support Level (S1) at $27,734, BTC recovered to wrap up the day at $28,153.

Economic Indicators Send the NASDAQ Composite Index and BTC South

US economic indicators continued to disappoint on Wednesday. The all-important ISM Non-Manufacturing PMI fell from 55.1 to 51.2 versus a forecasted 54.5. Notably, the employment index fell from 54.0 to 51.3. ADP numbers also weighed on riskier assets. In March, the ADP reported a 145k increase in employment, down from 261k in February. Economists forecast a rise of 200k.

After the weaker-than-expected JOLTs job openings on Tuesday and ISM Manufacturing PMI numbers on Monday, recessionary alarm bells have begun ringing.

The NASDAQ Composite Index fell by 1.07%. This morning, the NASDAQ mini was down 23.25 points, putting BTC under early pressure.

The Day Ahead

Later today, US initial jobless claims will influence the afternoon session. With the US Jobs report out on Friday, we expect BTC sensitivity to the numbers.

However, regulatory activity and lawmaker chatter will remain a focal point. Updates from the ongoing SEC v Ripple case and Binance and Coinbase (COIN)-related news will influence.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.36% to $28,051. A bearish start to the day saw BTC fall from an early high of $28,153 to a low of $27,996.

Technical Indicators

BTC needs to move through the $28,261 pivot to target the First Major Resistance Level (R1) at $28,693 and the Wednesday high of $28,801. A return to $28,500 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 $29,234 and resistance at $29,500. The Third Major Resistance Level (R3) sits at $30,207.

Failure to move through the pivot would leave the First Major Support Level (S1) at $27,720 in play. However, barring another crypto event-fueled sell-off, BTC should avoid sub-$27,000. The Second Major Support Level (S2) at $27,288 should limit the downside. The Third Major Support Level (S3) sits at $26,315.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a mixed signal. BTC sat at the 50-day EMA ($28,076). 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 ($28,076) would support a breakout from R1 ($28,693) to target R2 ($29,234) and $29,500. However, a fall through S1 ($27,720) and the 100-day EMA ($27,558) would bring S2 ($27,288) into view. A move through the 50-day EMA would send a bullish signal.