On Monday, bitcoin (BTC) fell by 0.11%. Following a 0.32% decline on Sunday, BTC ended the day at $21,773. BTC wrapped up the day at sub-$22,000 for the fifth consecutive session. After a choppy start to the day, BTC rose to a mid-morning high of $21,905.
Coming up short of the First Major Resistance Level (R1) at $22,039, BTC slid to a late afternoon low of $21,354. BTC briefly fell through the First Major Support Level (S1) at $21,609 and the Second Major Support Level (S2) at $21,423 before ending the day at $21,773.
On Monday, there were no US economic indicators to distract investors. Following the news of Kraken settling with the SEC and ceasing US crypto staking services, Paxos and Binance USD (BUSD) became the latest SEC target.
On Monday, news hit the wires of the SEC preparing to sue Paxos for the issuance and listing of Binance USD (BUSD). The SEC cited that the firm violated investor protection laws. Paxos released a statement in response to the Wells notice, saying it is prepared to litigate if necessary.
Paxos also stated that it categorically disagrees with the SEC staff because BUSD is not a security under federal securities laws. The SEC’s moves against crypto staking and stablecoins will create even more investor uncertainty and market volatility.
However, the BTC downside was modest, with the NASDAQ Composite Index providing support ahead of today’s US CPI Report. On Monday, the NASDAQ rose by 1.48%. Today, FTX, Genesis, and Silvergate Bank updates need monitoring. However, SEC chatter and the NASDAQ Composite Index will provide direction along with any Fed commentary.
An unexpected spike in US inflation and hawkish Fed chatter would be BTC bearish. FOMC members Logan and Williams will speak after the US CPI Report. Today, the BTC Fear & Greed Index remained within the Neutral zone despite another bearish BTC session.
The Index rose from 48/100 to 50/100. The latest move against stablecoins appeared to have a limited impact on investor sentiment, supported by BTC holding onto the $21,000 handle. Today, the US CPI Report will likely dictate the Fed interest rate trajectory over the near term.
With the markets expecting the interest rates to rise above 5%, today’s stats would need to surprise to the upside to raise the risk of more aggressive policy moves to return inflation to target. However, SEC activity could overshadow today’s US stats. Another SEC move would weigh on the Index and bring the Fear zone into view.
After returning to the Neutral zone, the Index must avoid the Fear zone to support a BTC run at $23,000. However, an Index return to the Fear zone would signal a near-term bullish trend reversal. At the time of writing, BTC was down 0.07% to $21,757. A mixed start to the day saw BTC fall to an early low of $21,739 before rising to a high of $21,805.
BTC needs to avoid a fall through the $21,677 pivot to target the First Major Resistance Level (R1) at $22,001. A return to $22,000 would signal a breakout session. The crypto news wires and US stats need to 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 $22,228. The Third Major Resistance Level (R3) sits at $22,779. A fall through the pivot would bring the First Major Support Level (S1) at $21,450 into play. However, barring another risk-off-fueled crypto sell-off, BTC should avoid sub-$21,000.
The Second Major Support Level (S2) at $21,126 should limit the downside. The Third Major Support Level (S3) sits at $20,575. Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat above the 200-day EMA ($21,714).
After a bearish cross on Saturday, the 50-day EMA pulled further back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals. A hold above the 200-day EMA (21,714) would support a breakout from R1 ($22,001) to target the 50-day EMA ($22,201) and R2 ($22,228).
However, a fall through the 200-day EMA ($21,714) would bring S1 ($21,450) and sub-$21,000 into view. A move through the 50-day EMA would send a bullish signal.
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