BTC Bears to Target Sub-$25,000 Amidst Intensifying Crypto Scrutiny

Key Insights:

• On Sunday, BTC gained 0.32% to end the day at $25,953.
• Dip buyers provided support at the end of a bearish week as investors considered the SEC moves and US lawmaker chatter.
• The technical indicators remain bearish, signaling a return to sub-$25,000.

On Sunday, bitcoin (BTC) rose by 0.32%. Partially reversing a 2.38% loss from Saturday, BTC ended the week down 4.32% to $25,953. Significantly, BTC ended the day at sub-$26,000 for the second time since March 16.

A bearish start to the day saw BTC fall to an early morning low of $25,668. Steering clear of the First Major Resistance Level (R1) at $25,897, BTC rose to a late-session high of $26,233. However, falling short of the First Major Resistance Level (R1) at $26,487, BTC eased back to end the week at $25,953.

A Quiet Sunday Leaves Dip Buyers to Offer Support

It was a quiet end to a hectic week for the crypto market. There were no crypto events to move the dial, leaving investors to consider the SEC charges against Binance and Coinbase (COIN).

With the SEC cracking down on two major US players, more SEC charges against crypto-related firms are likely. However, the Court rulings on the SEC v Ripple case could prove pivotal and help pave the way for US lawmakers to expedite regulatory reforms.

While there were no crypto events to consider, US Senator Cynthia Lummis is among lawmakers on Capitol Hill bidding to push through legislation to introduce an appropriate regulatory framework.

Overnight on Saturday, Senator Lummis had this to say,

“We successfully prevented Potus’ 30% digital asset mining tax from being included in the debt ceiling deal, but the fight is far from over. I am working on a regulatory framework that will allow individuals and companies to own and trade digital assets in America. Stay tuned.”

Progress towards a regulatory framework would ease pressure on BTC and the broader market and should bring an end to regulation by enforcement.

The Day Ahead

It is a quiet Monday, with no US economic indicators or FOMC member chatter to draw interest. The lack of economic indicators and chatter will leave BTC in the hands of the crypto news wires.

Investors should continue to monitor SEC v Ripple, SEC v Binance, and SEC v Coinbase-related news. However, US lawmakers and the SEC will also need monitoring throughout the session.

While SEC moves against crypto-related firms would be bearish, progress toward the rollout of legislation to deliver a US regulatory framework would provide support.

Senator Lummis is not alone in attempting to introduce regulatory clarity. Earlier this month, US Republican lawmakers Patrick McHenry and Glen “GT” Thompson released the Digital Asset Market Structure Draft Bill. The Bill aims for regulatory clarity, to remove gaps and to fuel innovation.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.03% to $25,960. A range-bound start to the day saw BTC fall to an early low of $25,946 before steadying.

BTC Technical Indicators

Resistance & Support Levels

BTC needs to avoid the $25,951 pivot to target the First Major Resistance Level (R1) at $26,235. A return to $26,000 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 $26,516 and resistance at $27,000. The Third Major Resistance Level (R3) sits at $27,081.

A fall through the pivot would bring the First Major Support Level (S1) at $25,670 into play. However, barring an event-fueled sell-off, BTC should avoid sub-$25,000. The Second Major Support Level (S2) at $25,386 should limit the downside. The Third Major Support Level (S3) sits at $24,821.

Looking at the EMAs and the 4-hourly candlestick chart (below), the EMAs sent bearish signals. BTC sat below the 50-day EMA ($26,353). The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, sending bearish signals.

A move through R1 ($26,235) would give the bulls a run at the 50-day EMA ($26,353) and R2 ($26,516). However, failure to move through the 50-day EMA ($26,353) would leave S1 ($25,670) in view. A move through the 50-day EMA would send a bullish signal.