Yesterday Bitcoin jumped following the news that Greyscale won the lawsuit against the SEC as the D.C. court ruled that the SEC improperly rejected the Bitcoin spot ETF. This was seen as a positive news as Greyscale will have to reapply for a spot ETF but that an ETF is actually coming. Looking at the bigger picture though, we have some bearish news all around as CryptoQuant reported that Bitcoin trading volume is at its lowest in more than four years and on the macro side we have recessionary fears caused by weakening data as yesterday's Job Openings and Consumer Confidence missed expectations by a big margin possibly pointing to a deterioration in the labour market. On top of that, the central banks are expected to keep monetary conditions tight even if we start to see more weakness creeping in, which should ultimately make the economic conditions and the risk sentiment worse.
Bitcoin Technical Analysis – Daily Timeframe
On the daily chart, we can see that Bitcoin bottomed out on the key 25231 support and after almost two weeks of consolidation it spiked up yesterday following the news of Greyscale winning the lawsuit again the SEC. The price found resistance near the previous support now turned resistance where we have also the confluence with the 61.8% Fibonacci retracement level. This is where the sellers should step back in with a defined risk above the level and target another fall into the support and eventually a break lower.
Bitcoin Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that now the buyers will have a strong support zone around the previous swing high at 26800 where we can also find the 61.8% Fibonacci retracement level of the entire leg higher and the red 21 moving average. This is where we can expect the buyers to pile in with a defined risk below the zone and target another extension to the upside.
Bitcoin Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is currently pulling back and from a risk management perspective, both buyers and sellers should refrain from entering the market here as it’s basically a no man’s land. The key levels to watch, in fact, are the resistance at 28300 and the support at 26800.
Upcoming Events
This week is an important one given that we will see many key labour market data for the US, including the NFP, before the next FOMC meeting. Weak data is likely to cause recessionary fears across the markets and weigh on Bitcoin, while strong readings should keep the Fed on the hawkish side and put a lid on the cryptocurrency’s upside. Today, we have the US ADP report, and after yesterday’s big miss in the US Job Openings, a weak report is likely to increase recessionary fears. Moving on to tomorrow, we will see the US Jobless Claims and the US PCE data. Finally, we conclude the week with the US NFP and the ISM Manufacturing PMI on Friday.
