U.S Inflation, the NASDAQ 100, and Regulators to Guide Bitcoin (BTC)

It was a bullish week ending 6^th February for Bitcoin (BTC). Partially reversing a 15.73% slide from the week prior, Bitcoin rallied by 11.86% to end the week at $42,412.

A Week in Review

Last week, the crypto market put aside concerns over increased regulatory scrutiny and the imminent release of an Executive Order from the White House on cryptos. Last week, we reported on the Biden administration affirming the imminent release of an Executive Order tasking agencies with the regulation of cryptos as a matter of national security. Agencies will work with regulators around the world to form a regulatory framework, not just for cryptocurrencies, but also for stablecoins and NFTs.

Delivering support in the week was the NASDAQ 100, which rose by 2.38%. A tech stock rout had weighed heavily on the NASDAQ 100 and Bitcoin ahead of key corporate earnings delivering support.

Key Fundamental Drivers for the Week Ahead

While economic data from the U.S is on the lighter side this week, a number of key stats will need considering. On Thursday, U.S inflation figures for January and weekly jobless claims figures will be key. With crypto market sensitivity to the FED reflected in Bitcoin price action through the early part of this year, another spike in U.S inflation could bring support levels into play. NASDAQ 100 movements will likely be a guide for Bitcoin and the broader market.

On the regulatory front, the markets will also be looking for any news updates on the executive order. There’s also the ongoing SEC vs Ripple (XRP) case to consider, and chatter from regulators in other key crypto jurisdictions.

Bitcoin Price Action

At the time of writing, Bitcoin was up by 0.57% to $42,653. A mixed start to the week saw Bitcoin fall to an early Monday low $41,700 before rising to a high $43,059.

For the week ahead, Bitcoin would need to avoid the week’s $40,473 pivot to support a run at the 38.2% FIB of $44,144 and the first major resistance level at $44,678. Bitcoin would need plenty of support, however, to breakout from the 38.2% FIB.

In the event of an extended rally, the second major resistance level at $46,944 will likely come into play.

A fall through the week’s $40,473 pivot, however, would bring the first major support level at $38,207 into play. Barring an extended sell-off, Bitcoin should avoid sub-$35,000 levels and the second major support level at $34,000.

Looking at the EMAs and daily candlesticks, the signal remains bearish. The 50-day EMA has flattened on the 100-day and 200-day EMAs, however. A narrowing of the 50 on the 100 would provide support in the week.

Through Monday morning, Bitcoin moved through the 50-day EMA, currently at $42,674. A breakout from the first major resistance level at $44,678 would bring the 100-day EMA, currently at $45,991 into play. Holding within range of the 50-day EMA will be key in the early part of the week.