BTC Bulls Eye Return to $31,500 on ETF Approval Optimism

Key Insights:

• On Tuesday, BTC gained 1.99% to end the day at $30,346.
• US bank downgrades and ETF-related chatter delivered a bullish session.
• The near-term technical indicators remain bullish, signaling a return to $31,500.

On Tuesday, bitcoin (BTC) gained 1.99%. Following a 0.90% rise on Monday, BTC wrapped the day at $30,346. Significantly, BTC held onto the $30,000 handle for the first time since July 23.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.08% to $30,321. A mixed start to the day saw BTC rise to an early high of $30,411 before falling to a low of $30,321.

Daily Chart

The Daily Chart showed BTC/USD sitting below the $30,750 – $31,250 resistance band. However, BTC sat above the 50-day ($29,532) and 200-day ($27,257) EMAs, sending bullish near and longer-term price signals. Notably, the 50-day EMA widened from the 200-day EMA, signaling further gains.

Looking at the 14-Daily RSI, the 59.40 reading reflects bullish sentiment. The RSI signals a breakout from the $30,750 – $31,250 resistance band to target $31,500. However, a fall through the 50-day EMA would bring sub-$28,500 and the $27,500 – $26,850 support band into view.

4-Hourly Chart

Looking at the 4-Hourly Chart, BTC remains below the $30,750 – $31,250 resistance band. BTC sits above the 200-day ($29,629) and 50-day ($29,617) EMAs, sending bullish near and longer-term price signals.

Significantly, the 50-day EMA converged on the 200-day EMA. A bullish cross of the 50-day EMA through the 200-day EMA would support a breakout from the $30,750 – $31,250 resistance band to target $31,500. However, a BTC fall through the EMAs would bring sub-$28,500 and the $27,500 – $26,850 support band into view.

The 14-4H RSI reading of 68.27 indicates a bullish stance, with buying pressure outweighing selling pressure. Significantly, the RSI aligns with the EMAs, signaling a return to $31,500.

Spot BTC ETF Chatter and US Bank Downgrades Delivered Price Support

On Monday, Moody’s cut the credit ratings of several small to medium-sized US banks and threatened to downgrade larger US banks on weaker profitability and liquidity. Following a similar reaction to the US banking sector liquidity crunch earlier this year, BTC and the broader market benefitted from the banking sector woes.

ETF-related chatter delivered further BTC and the broader market with price support on Tuesday. The SEC deadline to approve or decline the ARK Invest spot BTC ETF is August 13. While Cathie Wood of ARK Invest expects the SEC to break the deadline, the Ark Invest CEO expects the SEC to deliver multiple approvals. Approvals should lead to a significant influx of sticky institutional money.

The SEC approval of one, some, or all of the spot BTC ETF applications could significantly alter investor sentiment toward the US digital asset space and kickstart the next crypto bull run.

The Day Ahead

SEC v Ripple-related chatter, ETF updates, and Binance and Coinbase (COIN)-related news will move the dial.

However, US lawmaker chatter and SEC activity would also need consideration. Legislation to reduce SEC oversight powers would be a bullish scenario. However, the SEC threat of an appeal continues to leave BTC and the broader market in limbo.