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Key Insights:
- On Friday, BTC rallied 2.92% to end the day at $26,359.
- US economic indicators and hopes of a Blackrock BTC ETH allowed investors to brush aside hawkish Fed chatter.
- The technical indicators turned bullish, signaling a return to $27,000.
On Friday, bitcoin (BTC) rallied 2.92%. Following a 1.85% gain on Thursday, BTC ended the day at $26,359. Significantly, BTC enjoyed its first two-day winning streak since May.
After a range-bound morning, BTC fell to an early afternoon low of $25,211. Steering clear of the First Major Support Level (S1) at $25,035, BTC surged to a late afternoon high of $26,570. BTC broke through the First Major Resistance Level (R1) at $25,976 and the Second Major Resistance Level (R2) at $26,342 to end the day at $26,359.
US Economic Indicators Deliver a Second Bullish Afternoon Session
It was a relatively busy Friday session, with US consumer sentiment and expectation numbers providing afternoon support.
According to prelim figures, the Michigan Consumer Expectations Index rose from 55.4 to 61.3, with the Sentiment Index up from 59.2 to 63.9. Significantly, the Michigan Inflation Expectations Index fell from 4.2% to 3.3%, supporting a less hawkish Fed policy outlook.
Consumer sentiment toward easing inflation and the debt ceiling crisis resolution lifted the Sentiment Index. Following the better-than-expected retail sales figures for May, the Consumer Sentiment and Expectation numbers signal a more positive outlook and should ease recessionary fears.
Hawkish Fed chatter failed to dampen the mood. FOMC member Christopher Waller said,
“Inflation is just not moving, and that’s going to require, probably, some more tightening to try to get that going down.”
FOMC member Thomas Barkin also raised the prospects of a July hike, saying he supports more rate hikes considering current inflation levels.
BTC outmuscled the NASDAQ Composite Index, which fell by 0.68% on hawkish Fed chatter.
The Day Ahead
It is a quiet Saturday session. There are no US economic indicators for investors to consider, leaving BTC in the hands of the crypto market news wires.
SEC activity remains the focal point, with the ongoing SEC v Ripple case and the latest filings against Binance and Coinbase (COIN) areas of interest.
After the news of Blackrock Inc. (BLK) entering the crypto market, the hopes of regulators approving the launch would also provide support. In recent years, several attempts at launching BTC ETFs have failed.
A regulated Blackrock ETF would draw institutional investors, adding BTC to mainstream portfolios. However, Blackrock could face strong resistance considering the current regulatory landscape and the US Administration’s anti-crypto position.
Bitcoin (BTC) Price Action
This morning, BTC was down 0.26% to $26,290. A mixed start to the day saw BTC rise to an early high of $26,385 before falling to a low of $26,202.
BTC Technical Indicators
Looking at the EMAs and the 4-hourly candlestick chart (below), the EMAs sent bullish signals. BTC sat above the 100-day EMA ($26,238). The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, sending bullish signals.
A move through the 200-day EMA ($26,663) and R1 ($26,882) would give the bulls a run at the R2 ($27,406). However, a fall through the 100-day ($26,238) and 50-day ($25,935) EMAs would bring S1 ($25,523) and sub-$25,000 into view. A fall through the 50-day EMA would send a bearish signal.
Resistance & Support Levels
BTC needs to avoid the $26,047 pivot to target the First Major Resistance Level (R1) at $26,882 and $27,500. A move through the Friday high of $26,570 would signal an extended bullish session. The crypto news wires should be crypto-friendly to support an extended rally.
In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $27,406 and resistance at $27,500. The Third Major Resistance Level (R3) sits at $28,765.
A fall through the pivot would bring the First Major Support Level (S1) at $25,523 into play. However, barring a risk-off-fueled sell-off, BTC should avoid sub-$25,000 and the Second Major Support Level (S2) at $24,688. The Third Major Support Level (S3) sits at $23,329.
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