On the daily chart below for BTCUSD, we can
see that the really strong and quick rally in Bitcoin has stalled at the $30K resistance. The fundamental backdrop was
the collapse of the Silicon Valley Bank and the regional banking sector crisis
that made the market to expect rate cuts and thus eased financial conditions.
Those expectations have not been proved right yet as the economic data
rebounded.
The market might be wrong on the
rate cuts front and if more data starts to come in better than expected, the
Fed may be forced to keep hiking or at least not cutting until there is clear
evidence that inflation will return back to the 2% target. If this happens,
financial conditions will tighten again and the repricing in market
expectations will weigh heavily on Bitcoin.
On the 4
hour chart below, we can see that the price has been trading within a symmetrical
triangle just beneath the 30K resistance. Once the price broke out, it led to a
fall towards the 25231 support. The price is now pulling back, and it looks
like we will have some choppy price action until another fundamental catalyst
moves the market. The risk events to watch next are the US Jobless Claims
today and the Fed Chair Powell speech tomorrow. If the data beats expectations
and Powell sounds hawkish, we are likely to see new lows in BTC. On the other
hand, if the data misses and Powell sounds dovish, the Bitcoin bulls should
regain control.
On the 1 hour chart below, we can
see that there’s a minor support zone around the 27150 level where we can find confluence with the red long period moving
average and the 38.2% Fibonacci
retracement level. This area may be kind of a barometer for
today’s sentiment.
Stay below and the price may fall
into the support at 26600; stay above and the price should reclaim the 27500 high.
The buyers should wait for a break above the 27500 high before piling in and
target the 28323 resistance. The sellers, on the other hand, may want to wait
for a break below the 26600 swing low to then target the 25231 support.