BTC Finds Support on Hopes of a Ripple Win in the SEC v Ripple Case

Key Insights:

• It was a bullish Tuesday session, with BTC rising by 0.51% to end the day at $27,265.
• Hopes of a Ripple victory in the SEC v Ripple case offset investor sentiment toward the CFTC move against Binance.
• The technical indicators remain bullish, with $28,500 in view.

On Tuesday, bitcoin (BTC) rose by 0.51%. Partially reversing a 3.04% loss from Monday, BTC ended the day at $27,265.

A bearish start to the day saw BTC fall to a late morning low of $26,636. Steering clear of the First Major Support Level (S1) at $26,433, BTC rose to an early evening high of $27,529. However, falling short of the First Major Resistance Level (R1) at $27,924, BTC eased back to wrap up the day at $27,265.

Hopes of a Ripple Victory in the SEC v Ripple Case Delivered Support

It was a busy Tuesday as investors responded to updates on the CFTC lawsuit against Binance, CZ, and other executives.

While the latest regulatory move against a crypto platform will deliver increased uncertainty, the Commodities Futures Trading Commission may inadvertently have made life easier for US platforms.

The SEC and the CFTC have delivered conflicting views on whether ethereum (ETH) is a security or a commodity in an already opaque US regulatory landscape. The divergence supports a recent ruling from the presiding Judge in the Voyager Digital bankruptcy case.

In a letter to the presiding Judge in the SEC v Ripple case, referencing the Voyager Digital case, Ripple wrote,

“Judge Wiles found that cryptocurrency market participants operate in a regulatory environment that at best can be described as highly uncertain, in which regulators themselves cannot seem to agree as to whether cryptocurrencies are commodities that may be subject to regulation by the CFTC or whether they are securities that are subject to securities laws, or neither, or even on what criteria should be applied in making the decision.”

Judge Wiles went on to say,

“An uncertainty has persisted despite the fact that cryptocurrency exchanges have been around for a number of years.”

The SEC objected to the Ripple letter, saying,

“Defendants shamelessly mischaracterize the Voyager bankruptcy court’s statements and pluck choice phrases out of context in a misguided attempt to boost their unavailing fair notice defense.”

For the crypto market, regulatory infighting contrasts with other jurisdictions progressing in delivering clear regulatory guidelines to support innovation and growth. Regulatory infighting may be enough for crypto investors eying a Ripple win to ease the influence of the SEC on the digital asset space.

The Day Ahead

Investor sentiment toward the SEC v Ripple case and Binance and Coinbase (COIN)-related news will move the dial. Expect updates from the SEC v Ripple case to have more influence, with a Ripple win a boon for the crypto market.

Lawmaker chatter will also provide direction, with the EU actively introducing new crypto regulations to protect retail investors.

It will be a quiet afternoon session, with no US economic indicators to draw interest, leaving Fed chatter to influence market sentiment. With the markets expecting the Fed to hit pause on interest rates in response to the collapse of Silicon Valley Bank and Signature Bank, there has been a pickup in appetite for cryptos, albeit modestly.

With no US stats to influence, the banking sector will be in the spotlight again. US lawmakers will grill the Federal Reserve over the collapse of Silicon Valley Bank for a second session.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.04% to $27,277. A range-bound start to the day saw BTC fall to an early low of $27,257 before finding support.

BTC Technical Indicators

BTC needs to avoid the $27,143 pivot to target the First Major Resistance Level (R1) at $27,651. A move through the Tuesday high of $27,529 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 $28,036 and resistance at $28,500. The Third Major Resistance Level (R3) sits at $28,929.

A fall through the pivot would bring the First Major Support Level (S1) at $26,758 into play. However, barring another crypto event-fueled sell-off, BTC should avoid sub-$26,000. The Second Major Support Level (S2) at $26,250 should limit the downside. The Third Major Support Level (S3) sits at $25,357.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a mixed signal. BTC sat above the 100-day EMA ($26,483). The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA, sending mixed signals.

A move through the 50-day EMA ($27,290) would support a breakout from R1 ($27,651) to target R2 ($28,036) and $28,500. However, a fall through S1 ($26,758) would bring the 100-day EMA ($26,483) into play. A move through the 50-day EMA would send a bullish signal.