Key Insights:
- On Tuesday, BTC rose by 2.06% to end the day at $28,679.
- Banking sector woes, US economic indicators, and easing Fed Fear delivered a bullish Tuesday session.
- The technical indicators turned more bullish, signaling a return to sub-$29,000.
On Tuesday, bitcoin (BTC) rose by 2.06%. Partially reversing a 3.94% loss from Monday, BTC ended the day at $28,679. Despite the bullish session, BTC fell short of the $29,000 handle for the first time in seven sessions.
A bearish start to the day saw BTC fall to an early morning low of $27,901. Steering clear of the First Major Support Level (S1) at $27,413, BTC rose to an early evening high of $28,888. However, falling short of the First Major Resistance Level (R1) at $29,068, BTC eased back to end the day at $28,679.
US Economic Indicators Ease Bets of a Hawkish Fed Rate Hike
It was a relatively busy Tuesday session, with US economic indicators and the banking sector in focus. Weaker-than-expected JOLTs job openings supported an afternoon breakout.
JOLT’s Job Openings fell from 9.974 million to 9.590 million. While the rate of quits was reportedly little changed at 2.5%, the number of quits in the accommodation and food services industry fell by 178,000, a signal of deteriorating sector conditions.
The weaker JOLTs job openings led to a shift in sentiment toward the Fed policy outlook.
According to the CME FedWatch Tool, the probability of a 25-basis point May interest rate hike fell from 93.2% to 88.7% in 24 hours. Significantly, the chances of a 25-basis point June interest rate hike fell from 27.7% to 0.50%.
Banking sector woes supported the bullish BTC session, with US regional banks under pressure over fears of a more sinister banking crisis. Failure to resolve the US debt ceiling also weighed on riskier assets, with the NASDAQ Composite Index ending Tuesday with a 1.08% loss.
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The Day Ahead
It is a busy Tuesday session. US ISM Non-Manufacturing PMI and ADP nonfarm employment change figures will influence the early afternoon session. Following the disappointing JOLTs job openings, weak labor market numbers would ease bets of a hawkish Fed interest rate hike.
Late in the afternoon, the Fed will be in focus. The markets expect a 25-basis point interest rate hike, leaving forward guidance to move the dial. Barring a surprise decision, Fed plans to deliver another 25-basis point hike in June would be a bearish scenario.
While the Federal Reserve and economic indicators will influence, investors should track SEC v Ripple case updates and Binance and Coinbase (COIN)-related news.
However, regulatory activity and US lawmaker chatter will also move the dial.
Bitcoin (BTC) Price Action
This morning, BTC was down 0.30% to $28,593. A mixed start to the day saw BTC rise to an early high of $28,694 before falling to a low of $28,539.
Technical Indicators
Resistance & Support Levels
| R1 – $ | 29,078 | S1 – $ | 28,091 |
| R2 – $ | 29,476 | S2 – $ | 27,502 |
| R3 – $ | 30,463 | S3 – $ | 26,515 |
BTC needs to avoid the $28,489 pivot to target the First Major Resistance Level (R1) at $29,078. A move through the Tuesday high of $28,888 would signal an extended bullish session. The crypto news wires and the Fed 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 $29,476 and resistance at $30,000. The Third Major Resistance Level (R3) sits at $30,463.
A fall through the pivot would bring the First Major Support Level (S1) at $28,091 into play. However, barring a crypto event-fueled sell-off, BTC should avoid sub-$27,500. The Second Major Support Level (S2) at $27,502 should limit the downside. The Third Major Support Level (S3) sits at $26,515.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was bullish signals. BTC sat below the 50-day EMA ($28,689). The 50-day EMA converged on the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, sending bullish signals.
A bullish cross of the 50-day EMA through the 100-day EMA would support a breakout from R1 ($29,078) to give the bulls a run at R2 ($29,476) and $30,000. However, a fall through the 200-day EMA ($28,337) would bring S1 ($28,091) and sub-$28,000 Support Levels into view. A move through the 50-day ($28,689) and 100-day ($28,698) EMAs would send a bullish signal.
