BTC Faces Risk of Sub-$29,500 on pre-Capitol Hill Hearing Angst

Key Insights:

• BTC ended the Sunday session with a 0.03% gain to end the session at $30,286.
• A quiet Sunday left BTC flat as investors considered the Tuesday digital asset sub-committee hearing.
• The technical indicators remain bullish, signaling a run to $35,000.

On Sunday, bitcoin (BTC) rose by 0.03%. Following a 0.60% loss on Saturday, BTC ended the week up 6.94% to $30,286. While falling short of the Friday 2023 high, BTC avoided sub-$30,000 for the third time since May 2022.

A bearish start to the day saw BTC fall to an early morning low of $30,103. BTC fell through the First Major Support Level (S1) at $30,122 before rallying to an early evening high of $30,623. BTC broke through the First Major Resistance Level (R1) at $30,505 before sliding back to end the session at $30,286.

BTC Ends the Week Range-Bound with no Crypto Events to Influence

It was a quiet end to the week. There were no crypto events to provide direction, leaving investors to consider recent regulatory activity, US economic indicators, and Fed commentary.

Hawkish Fed chatter from Friday likely resonated over the weekend. FOMC member Christopher Waller called for more rate hikes to bring inflation to target. Waller had this to say,

“Monetary policy needs to be tightened further. How much further will depend on incoming data on inflation, the real economy, and the extent of tightening credit conditions.”

Waller’s comments sent the NASDAQ Composite Index into the red on Friday, while the dollar soared. The market reaction to the hawkish comments came despite disappointing US retail sales figures, which raised more red flags.

Regulatory risk also pegged BTC back from a return to $31,000. The shift in SEC focus to the DeFi space created more market angst ahead of tomorrow’s digital asset sub-committee hearing. SEC Chair Gary Gensler will likely face lawmaker scrutiny on the SEC’s regulation by enforcement mantra and the collapse of FTX.

The Day Ahead

Investors should monitor the crypto news wires for SEC v Ripple case-related chatter and Binance and Coinbase (COIN)-related news. However, regulatory activity and US lawmaker commentary would also move the dial.

US economic indicators and Fed commentary will draw interest this afternoon. Hawkish Fed speeches and better-than-expected NY Empire State Manufacturing Index figures could test buyer appetite.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.22% to $30,219. A mixed start to the day saw BTC rise to an early high of $30,290 before falling to a low of $30,203.

Technical Indicators

BTC needs to move through the $30,337 pivot to target the First Major Resistance Level (R1) at $30,572 and the Sunday high of $30,623. A return to $30,500 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 $30,857 and resistance at $31,000. The Third Major Resistance Level (R3) sits at $31,377.

Failure to move through the pivot would leave the First Major Support Level (S1) at $30,052 in play. However, barring an event-fueled sell-off, BTC should avoid sub-$29,500. The Second Major Support Level (S2) at $28,817 should limit the downside. The Third Major Support Level (S3) sits at $29,297.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($29,796). The 50-day EMA pulled further 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 ($29,796) would support a breakout from R1 ($30,572) to target R2 ($30,857) and $31,000. However, a fall through S1 ($30,052) would bring S2 ($29,817) and the 50-day EMA ($29,796) into view. A fall through the 50-day EMA would send a bearish signal.