BTC Bulls to Target $28,000 on Bullish Sentiment From Friday

Key Insights:

• On Friday, BTC ended a four-day losing streak, rising by 1.57% to end the day at $27,254.
• US economic indicators, the US Debt Limit Suspension Bill, and the NASDAQ Composite Index supported a bullish session.
• However, the technical indicators turned less bearish, signaling a return to $28,000.

On Friday, bitcoin (BTC) rose by 1.57%. Reversing a 1.42% loss from Thursday, BTC ended the day at $27,254. Significantly, BTC ended a four-day losing streak.

A choppy start to the day saw BTC slide to a first-hour low of $26,511 before making a move. Finding support at the First Major Support Level (S1) at $26,546, BTC rose to a late-session high of $27,301. BTC broke through the First Major Resistance Level (R1) at $27,239 to end the day at $27,254.

US Stats and the Debt Limit Suspension Bill Delivered Support

It was a busy Friday session. The Senate passed the Debt Limit Suspension Bill in time for the US to avoid a Monday default on Thursday. While BTC initially fell into the red, a pickup in appetite for riskier assets supported an early recovery.

After a quiet morning session, US economic indicators supported a Fed pause in June.

Average hourly earnings fell short of expectations, rising by 0.3% versus a forecasted 0.4% in May. Softer wage growth came despite another sharp increase in nonfarm payrolls, which surged by 339k versus 294k in April. Economists forecast a 180k rise. The unemployment rate unexpectedly rose from 3.4% to 3.7% despite the surge in hiring.

The passing of the Debt Limit Suspension Bill and the US economic indicators failed to drive bets on a June interest rate hike.

According to the CME FedWatch Tool, the probability of a June interest rate hike rose from 20.4% to 25.3%. One week earlier, the chance of a 25-basis point hike stood at 64.2%.

US equities responded to the stats and the passing of the Bill, with the NASDAQ Composite Index gaining 1.07%. The Dow and S&P 500 enjoyed more bullish sessions, rising by 2.12% and 1.45%, respectively.

There were no crypto events to influence the Friday session.

The Day Ahead

It is a quiet Saturday session, with no US economic indicators to move the dial. The quiet session will allow investors to digest events from the week and consider the Fed’s monetary policy outlook and continued scrutiny of the US crypto market.

On Friday, Republicans released a Digital Asset Market Structure Proposal to categorize cryptos as securities and commodities and assign clear boundaries for the CFTC and the SEC to regulate the digital asset space. Chairman of the Financial Services Committee Patrick McHenry had this to say,

“This discussion draft is the first step toward delivering on Republicans’ commitment to develop clear rules of the road for the digital asset ecosystem.”

With lawmaker activity in focus, investors should also monitor SEC and CFTC chatter, SEC v Ripple updates, and Binance and Coinbase (COIN)-related news.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.36% to $27,155. A bearish start to the day saw BTC fall from an opening price of $27,253 to a low of $27,129.

BTC Technical Indicators

Resistance & Support Levels

BTC needs to avoid the $27,022 pivot to target the First Major Resistance Level (R1) at $27,533. A move through the Friday high of $27,301 would signal an extended bullish session. 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 $27,812 and resistance at $28,000. The Third Major Resistance Level (R3) sits at $28,602.

A fall through the pivot would bring the First Major Support Level (S1) at $26,743 into play. However, barring an event-fueled sell-off, BTC should avoid sub-$26,500 and the Second Major Support Level (S2) at $26,232. The Third Major Support Level (S3) sits at $25,442.

Looking at the EMAs and the 4-hourly candlestick chart (below), the EMAs sent mixed signals. BTC sat below the 50-day EMA ($27,164). The 50-day EMA closed in on the 100-day EMA, while the 100-day EMA eased back from the 200-day EMA, sending mixed signals.

A move through the 50-day ($27,164) and 100-day ($27,192) EMAs would support a breakout from the 200-day EMA ($27,393) and R1 ($27,533) to target R2 ($27,812). However, failure to move through the 50-day EMA ($27,164) would leave S1 ($26,743) in view. A move through the 50-day EMA would send a bullish signal.