Last week, 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. The market started to “selling the fact” and eventually returned to the key support level. Looking at the bigger picture, 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 more and more deteriorating economic data that point to a possible recession in Q4 2023 or Q1 2024. 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 rallied into the resistance zone around the 28200 area where we had also the 61.8% Fibonacci retracement level but got rejected soon after as the market “sold the fact” on the positive Bitcoin news. The price is now trading again at the key 25231 support. If we see a break to the downside, Bitcoin is likely to fall all way to the 21509 level.
Bitcoin Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the buyers had a good support zone around the 26800 level where there was also the 61.8% Fibonacci retracement level but the price fell through it like nothing confirming the bearish bias. We are now in a consolidation after two weeks of high volatility, but these are generally just rests before the big moves.
Bitcoin Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a range inside the orange box. A break to the upside should see the buyers piling in to target the 26750 level and eventually the 28200 one. On the other hand, a break to the downside should see more sellers piling in and extend the selloff into the 21509 level.
Upcoming Events
This week is a bit empty on the data front with just the US ISM Services PMI today and the US Jobless Claims tomorrow being the main highlights. If we see strong data, the market is unlikely to price an imminent recession and thus it shouldn’t affect Bitcoin too much. On the other hand, weak data should bring back recessionary fears and likely trigger some risk aversion in the markets eventually weighing on Bitcoin.
