BTC Bulls to Target $29,000 as Investors Brush Aside SEC Noise

Key Insights:

• On Monday, BTC rebounded from the Monday stumble, gaining 5.84% to end the day at $27,233.
• There were no crypto events to deliver the rebound, leaving dip buyers to brush side SEC v Binance-related news and provide support.
• The technical indicators turned bullish, signaling a return to $28,500.

On Tuesday, bitcoin (BTC) rallied 5.84%. Reversing a 5.15% slide from Monday, BTC ended the day at $27,233. Significantly, BTC fell short of the $27,500 handle for the sixth consecutive session.

After a range-bound morning, BTC fell to a midday low of $25,331 before finding support. Steering clear of the First Major Support Level (S1) at $25,035, BTC rallied to a final-hour high of $27,365. BTC broke through the First Major Resistance Level (R1) at $26,780 to end the day at $27,233.

SEC Turned the Screw on Binance but Not the Crypto Market

It was a busy Tuesday session. News of the SEC filing a motion to freeze Binance US assets failed to cause a stir. According to the Court filing,

“The SEC respectfully submits that this relief is necessary on an expedited basis to ensure the safety of customer assets and prevent the dissipation of available assets for any judgment, given the defendants’ years of violative conduct, disregard of the laws of the United States, evasion of regulatory oversight, and open questions about various financial transfers and the custody and control of Customer Assets.”

Significantly, the filing may put customer assets at risk, with the collapse of Binance a Lehman event for the crypto market. The SEC filing brandishes Binance as guilty even before Court proceedings.

Binance CEO CZ responded to the SEC Court filing, saying,

“Clarifications, this could only affect Binance US, IF granted by the court. It does not affect Binance.com. Funds are SAFU.”

In response to the SEC attempts to freeze Binance US assets, withdrawals will likely continue to accelerate, which will reflect the platform’s liquidity. Hints of plans to suspend withdrawals would send BTC and the broader crypto market into a tailspin.

The Day Ahead

It is a quiet Wednesday session. Trade data from China will influence market risk appetite this morning. However, there are no US economic indicators or Fed commentary to consider.

The lack of economic indicators will leave BTC and the broader crypto market in the hands of the US Courts. A ruling in favor of the SEC’s request to freeze the assets of Binance US would weigh. However, SEC v Ripple-related news would also move the dial.

Investors should also monitor SEC and CFTC chatter and Coinbase (COIN)-related news.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.04% to $27,244. A range-bound start to the day saw BTC fall to an early low of $27,187 before rising to a high of $27,280.

BTC Technical Indicators

Resistance & Support Levels

BTC needs to avoid the $26,643 pivot to target the First Major Resistance Level (R1) at $27,955 and $28,500. A return to $27,500 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 $28,677 and resistance at $29,000. The Third Major Resistance Level (R3) sits at $30,711.

A fall through the pivot would bring the First Major Support Level (S1) at $25,921 into play. However, barring an event-fueled sell-off, BTC should avoid sub-$25,000 and the Second Major Support Level (S2) at $24,609. The Third Major Support Level (S3) sits at $22,575.

Looking at the EMAs and the 4-hourly candlestick chart (below), the EMAs sent bullish signals. BTC sat above the 200-day EMA ($27,247). The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, sending bullish signals.

A hold above the 200-day EMA ($27,247) would support a breakout from R1 ($27,955) to give the bulls a run at R2 ($28,677) and $29,000. However, a fall through the EMAs would bring S1 ($25,921) into view. A fall through the 50-day EMA ($26,848) would send a bearish signal.