Key Insights:
- BTC gives up the $41,000 handle as investors await the Fed interest rate decision.
- Crypto-spot ETF news failed to offer Wednesday morning support despite progress toward the January 5-10 approval window.
- Regulatory risk remains another headwind as Senator Elizabeth Warren targets the US digital asset space.
Bitcoin at Sub-$41,000 as Fed Fear Resurfaces
Bitcoin (BTC) gained 0.55% on Tuesday. After a 5.81% slide on Monday, BTC ended the session at $41,514.
The upside was modest, with BTC falling short of the $43,000 handle for the first time since December 4.
On Wednesday, movement across the crypto market suggested Fed jitters could influence buyer appetite. A better-than-expected US Jobs Report and sticky US inflation support a hawkish Fed rate path. Uncertainty about the Fed’s economic projections contributed to the morning loss.
However, regulatory uncertainty and caution before the January 5-10 BTC-spot ETF approval window are also headwinds. Increasing interest in Senator Warren’s Digital Asset Anti-Money Laundering Act could test crypto investor resilience. The relationship between Senator Warren and SEC Chai Gary Gensler may affect market optimism about the SEC approving a batch of BTC-spot ETF applications.
There were no significant updates as issuers made progress toward finalizing applications before the approval window. However, Bloomberg Intelligence ETF Analyst James Seyffart shared the latest from Nate Geraci, who posted,
“Several key takeaways from my chat today w/ @stevenmcclurg on spot bitcoin ETF race…
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ValkyrieFunds having very detailed conversations w/ SEC on structure. Said “getting very close.
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Believes ETFs come to market using cash creates.
COIN SSA matters a lot less now.”
On Wednesday morning, BTC was down 1.30% to $40,974.
BTC-spot ETF-related new and regulatory chatter remain focal points.
However, a fall through the $40,800 support level would bring sub-$40,000 and the $39,600 support level into play.
The 14-Daily RSI reading, 55.05, indicates a BTC return to the $42,900 resistance level before entering overbought territory.
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Ethereum Analysis
ETH sat above the 50-day and 200-day EMAs, sending bullish price signals.
An ETH return to $2,250 would support a move to the $2,300 resistance level.
However, a break below the $2,143 support level would give the bears a run at the 50-day EMA.
The 14-period Daily RSI at 51.83 suggests an ETH return to the $2,300 resistance level before entering overbought territory.
