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.
BTCUSD technical analysis
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.