BTC Remains at Risk of Sub-$28,500 on US Stats and the SEC

Key Insights:

• On Wednesday, BTC gained 0.44% to end the day at $29,458.
• Fed Chair Powell provided much-needed support despite leaving the door ajar to a September rate hike.
• However, the near-term technical indicators remained bearish, signaling a return to sub-$28,500.

On Wednesday, bitcoin (BTC) gained 0.44%. Following a 0.11% gain on Tuesday, BTC ended the day at $29,458. Significantly, BTC came up short of $30,000 for the second time since June 20.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.12% to $29,494. A mixed start to the day saw BTC fall to an early low of $29,410 before rising to a high of $29,529.

Daily Chart

The Daily Chart showed BTC/USD sitting below the $30,750 – $31,250 resistance band. However, BTC broke through the 50-day EMA ($29,458) while holding above the 200-day EMA ($26,903), sending bullish near and longer-term price signals. Notably, the 50-day EMA widened from the 200-day EMA, supporting further gains.

However, looking at the 14-Daily RSI, the 45.07 reading signaled a bearish outlook. The RSI signals a BTC fall through the 50-day EMA ($29,458) to bring sub-$28,500 into view. However, a BTC hold above the 50-day EMA ($29,458) would support a run at $30,000 and the $30,750 – $31,250 resistance band.

4-Hourly Chart

Looking at the 4-Hourly Chart, BTC remains below the $30,750 – $31,250 resistance band and the 50-day ($29,736) and 200-day ($28,781) EMAs, signaling bearish price momentum.

Significantly, the 50-day EMA crossed through the 200-day EMA, signaling a return to sub-$28,500. However, a BTC move through the 50-day ($29,736) and 200-day ($29,781) EMAs would support a run at the $30,750 – $31,250 resistance band.

The 14-4H RSI reading of 47.62 indicates a bearish stance, with selling pressure outweighing buying pressure. Significantly, the RSI aligns with the 50-day EMA, signaling near-term bearish momentum and a return to sub-$28,500.

Fed Chair Powell Delivers Support Amidst Bearish Sentiment

It was a busy Wednesday session, with the SEC and US lawmakers in focus. However, BTC needed the assistance of the Fed to avoid a return to sub-$29,000.

In line with market expectations, the Fed raised the Fed Funds Rate by 25 basis points. However, Fed Chair Powell left the door ajar for a September hike, saying,

“It is certainly possible that we would raise the (Fed) funds rate again at the September meeting if the data warranted, and I would also say it’s possible that we would choose to hold steady at that meeting.”

Hopes of softer inflation during the summer break eased the fear of further rate hikes. Powell also highlighted that central bank staff are no longer forecasting a recession, supporting the bets on a soft landing, and limiting the impact of the policy outlook on investor sentiment.

Hopes of progress toward a US crypto regulatory framework also provided price support.

On Wednesday, Chairman Patrick McHenry delivered opening remarks at a session to mark up comprehensive digital asset market structure legislation.

Amicus Curiae attorney John Deaton had this to say about the regulatory void,

“You have this bill along with Senator Lummis and Senator Gillibrand’s bill. Gary Gensler and all SEC Commissioners should take notice. Congress intends to fill the regulator gap Gensler admitted existing during his confirmation hearing. It’s the same regulatory gap that was discussed in the Hinman speech emails. It’s time to demonstrate a faithful allegiance to the law and honor your core mission of investor protection.”

Significantly, a US crypto regulatory framework should end the SEC’s reign of regulation by enforcement.

The Day Ahead

It is another busy day for BTC and the broader market. SEC v Ripple chatter, ETF updates, and Binance and Coinbase (COIN)-related news will need consideration,

However, US GDP numbers for Q2 could also move the dial. While Fed Chair Powell discussed avoiding a US recession, weaker-than-expected GDP numbers could test the theory.