BTC Bears to Test Safe Haven Status as Credit Suisse Enters Crisis Mode

Key Insights:

• It was a bearish Saturday session, with BTC falling by 1.60% to end the day at $26,914.
• Profit-taking left BTC at sub-$27,000 as investors considered the latest Credit Suisse news.
• Technical indicators are bullish, with $30,000 still in view.

On Saturday, bitcoin (BTC) fell by 1.60%. Partially reversing a 9.14% breakout from Friday, BTC ended the day at $26,914. Despite the bearish session, BTC avoided sub-$26,000 for the first time since June 2022.

A bullish start to the day saw BTC rise to an early high of $27,621. Falling short of the First Major Resistance Level (R1) at $28,291, BTC fell to a late afternoon low of $26,547. However, steering clear of the First Major Support Level (S1) at $25,682, BTC revisited the $27,400 handle before falling back into negative territory.

Banking Crisis Extends Beyond US Borders

On Saturday, news hit the wires of the Swiss cabinet holding a crisis meeting to discuss the future of Credit Suisse Group AG (CS). The report of cabinet talks coincided with reports of UBS AG entering into discussions to acquire Credit Suisse Group AG.

According to Reuters, UBS AG (UBS) has requested the Swiss government to cover circa $6 billion in costs to acquire the beleaguered bank. The fallout from the collapse of Silicon Valley Bank and Signature Bank (SBNY) is beginning to show its teeth. Reportedly, the Swiss government has pressed the banks to agree on terms before the market opening bell on Monday.

Reuters also reported that Warren Buffet discussed the banking crisis with senior US administration officials.

BTC and the broader crypto market responded to the news, though the downside was modest, with BTC further demonstrating its safe haven attributes. Credit Suisse shares tumbled by 26.1% last week and could become the next victim of the banking crisis.

There were no crypto events to influence investor sentiment, with regulators and lawmakers having to focus on the banking sector.

The Day Ahead

Investors should continue to monitor the news wires for updates from the UBS and Credit Suisse talks. Failure to reach an agreement could see Credit Suisse collapse, which would send shockwaves across the global financial markets.

BTC and the broader crypto market will be in for another test today. Investors may consider crypto assets as a safer alternative until the banking crisis runs its course.

As the crypto market considers the latest news, investors should continue to monitor Binance and FTX news and updates from the ongoing SEC v Ripple case.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.77% to $27,120. A bullish start to the day saw BTC rise from an opening price of $26,916 to a high of $27,190 before easing back.

Technical Indicators

BTC needs to avoid the $27,027 pivot to target the First Major Resistance Level (R1) at $287,508. A move through the Saturday high of $27,621 would signal an extended bullish session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $28,101 and resistance at $28,500. The Third Major Resistance Level (R3) sits at $29,175.

A fall through the pivot would bring the First Major Support Level (S1) at $26,434 into play. However, barring a crypto event-fueled crypto sell-off, BTC should avoid sub-$25,000. The Second Major Support Level (S2) at $25,953 should limit the downside. Investors should take caution on news of UBS and Credit Suisse talks breaking down.

The Third Major Support Level (S3) sits at $24,879.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($24,802). The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA moving away from the 200-day EMA, sending bullish signals.

A hold above the Major Support Levels and the 50-day EMA ($24,802) would support a breakout from R1 ($27,508) to target R2 ($28,101) and $28,500. However, a fall through S1 ($26,434) would bring S2 ($25,953) into view. A fall through the 50-day EMA would send a bearish signal.