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Key Insights:
- On Friday, BTC bucked the broader market trend for a second session, rising by 0.77% to end the day at $29,540.
- The US Sovereign Rating downgrade continued to deliver price support.
- Notably, the near-term technical indicators turned bullish, signaling a return to $30,000.
On Friday, bitcoin (BTC) rose by 0.77%. Following a 0.19% gain on Thursday, BTC ended the day at $29,540. Significantly, BTC avoided sub-$29,000 while falling short of $30,000 for the second consecutive session.
Bitcoin (BTC) Price Action
This morning, BTC was down 0.12% to $29,506. A range-bound start to the day saw BTC rise to an early high of $29,584 before falling to a low of $29,482.
Daily Chart
The Daily Chart showed BTC/USD sitting below the $30,750 – $31,250 resistance band. However, BTC sat above the 50-day ($29,453) and 200-day ($27,146) EMAs, sending bullish near and longer-term price signals. Notably, the 50-day EMA widened from the 200-day EMA, signaling further gains.
Looking at the 14-Daily RSI, the 47.59 reading reflects bearish sentiment. The RSI signals a fall through the 50-day EMA to bring sub-$28,500 and the $27,500 – $26,850 support band into view. However, a hold above the 50-day EMA ($29,453) would give the bulls a run at the $30,750 – $31,250 resistance band.
4-Hourly Chart
Looking at the 4-Hourly Chart, BTC remains below the $30,750 – $31,250 resistance band. However, BTC sits above the 50-day EMA ($29,422) while remaining below the 200-day EMA ($29,613) EMAs, sending bullish near-term but bearish longer-term price signals.
Significantly, the 50-day EMA narrowed on the 200-day EMA, supporting further gains. A move through the 200-day EMA ($29,613) would give the bulls a run at the $30,750 – $31,250 resistance band. However, a fall through the 50-day EMA ($29,422) would bring sub-$28,500 and the $27,500 – $26,850 support band into view.
The 14-4H RSI reading of 54.04 indicates a bullish stance, with buying pressure outweighing selling pressure. Significantly, the RSI aligns with the 50-day EMA, signaling a return to $30,000.
BTC Bucks the Market Trend on US Sovereign Rating Downgrade Support
BTC bucked the broader market trend for a second session on Friday. This week, Fitch Ratings downgraded the US sovereign rating from AAA to AA+.
In recent months, the BTC – NASDAQ Composite Index correlation has weakened, limiting the impact of the US ratings downgrade on BTC. While BTC saw green for the second consecutive session, the NASDAQ Composite Index extended the losing streak to four sessions on Friday, falling by 0.36%.
The weakening correlation could see increased demand for BTC as sentiment across the traditional asset classes turned bearish. Price action over the weekend will likely dictate the near-term outlook. Approvals of the spot BTC ETFs would be a step in the right direction as the broader crypto market struggles with uncertainty surrounding the Judge Torres Court ruling.
The Day Ahead
It is a quiet start to the weekend, leaving investors to consider the crypto events of the week. Scrutiny of the Judge Torres Court ruling failed to drag BTC into the red on Friday.
Rising bets on an SEC appeal may not impact BTC directly, with the SEC leaving BTC outside the security basket. However, an SEC appeal of the Judge Torres ruling would leave the US digital asset space in more disarray without US lawmaker legislation to end the SEC regulation by enforcement mantra.
However, investors should continue to monitor the crypto news wires. SEC v Ripple and SEC v Terraform Lab chatter, ETF updates, and Binance and Coinbase (COIN)-related news will move the dial.
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