BTC Bulls to Target a First Return to $31,000 Since 2022

Key Insights:

• On Thursday, BTC consolidated the Thursday rally, falling by a modest 0.32% to end the day at $29,919.
• Market hopes for one final Fed interest rate hike and renewed market optimism following the Blackrock ETF filing delivered support.
• The technical indicators remained bullish, signaling a return to $31,000.

On Thursday, bitcoin (BTC) slipped by 0.32%. Partially reversing a 5.96% rally from Wednesday, BTC ended the day at $29,919. Despite the bearish session, BTC struck a session high of $30,597, its highest level since $30,623 on April 16.

A bullish start to the day saw BTC rise to an early morning high of $30,527. Falling short of the First Major Resistance Level (R1) at $31,115, BTC fell to an early afternoon low of $29,587. However, steering clear of the First Major Support Level (S1) at $28,600, BTC revisited the $30,200 handle before falling back into negative territory.

Fed Interest Rate Expectations and Blackrock Deliver Support

It was a busy Thursday session, with Fed Chair Powell, FOMC member chatter, and US jobless claims drawing interest.

Fed Chair Powell delivered a second day of Testimony on Capitol Hill, pointing to further interest rate hikes to curb inflation. While the FOMC projects two interest rate hikes and a peak Fed Fund Rate of 5.6%, the markets are betting on softer inflation to ease pressure on the Fed.

US jobless claims held steady at 264k, which supported the appetite for riskier assets. The NASDAQ Composite Index gained 0.95% on Thursday.

Beyond the US economic calendar, market sentiment toward the crypto market continued to improve. The Blackrock (BLK) filing for a BTC ETF continued to drive the hope of an influx in institutional money.

An IMF report on Central Bank Digital Currencies (CBDCs) likely contributed to the BTC return to $30,500. While continuing to call for greater crypto regulation, the IMF had this to say,

“While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run.”

The IMF comments were regarding the LatAm region, with the IMF adding,

“The region should instead focus on addressing the drivers of crypto demand, including citizens’ unmet digital payment needs, and on improving transparency, by recording crypto asset transactions in national statistics.”

The Day Ahead

It is a busy Friday session, with US private sector PMIs and FOMC member chatter in focus this afternoon. A pickup in service sector activity should ease fears of a US recession and support riskier assets. Forward guidance on Fed policy will also influence.

However, investors should continue to monitor the crypto news wires. The SEC cases against Ripple, Binance, and Coinbase (COIN) remain the focal points.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.45% to $30,055. A bullish start to the day saw BTC rise from an early low of $29,907 to a high of $30,070 before easing back.

BTC Technical Indicators

Looking at the EMAs and the 4-hourly candlestick chart (below), the EMAs sent bullish signals. BTC sat above the 50-day EMA ($27,838). The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, sending bullish signals.

A hold above the Major Support Levels and the 50-day EMA ($27,838) would support a move through R1 ($30,435) to give the bulls a run at R2 ($30,951) and $31,000. However, a fall through S1 ($29,495) would bring S2 ($29,071) into view. A fall through the 50-day EMA ($27,838) would send a bearish signal.

Resistance & Support Levels