Bitcoin (BTC) Steadies at $20,000 Amidst Sustained Market Volatility
Key Insights:
- On Friday, bitcoin (BTC) rose by 0.29%, the modest upside followed a Thursday sell-off that tested support at $20,000.
- The relief rally came despite investor sentiment toward central bank monetary policy and recession fears.
- Technical indicators are bearish, with bitcoin sitting well below the 50-day EMA.
On Friday, bitcoin (BTC) rose by 0.29%. Failing to make a dent in the 9.72% slide from Thursday, bitcoin ended the day at $20,432,
A mixed start to the day saw BTC fall to an early low of $20,221.
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Steering clear of sub-$20,000, BTC struck a mid-morning high of $21,331 before easing back to a range-bound afternoon session.
While avoiding another heavy loss, the modest gain reflected ongoing concerns over the economic outlook and a likely shift in the crypto regulatory landscape.
A pickup in risk appetite did provide support, with the NASDAQ gaining 1.43% to reduce the week’s deficit. In the week ending June 17, the NASDAQ 100 ended the week with a 4.78% loss. By contrast, bitcoin was down 23.2% Monday through Friday.
Bitcoin Support at $20,000 Could Prove Key for the Crypto Market
In a particularly choppy week, bitcoin avoided a fall to sub-$20,000, with support at $20,000 proving to be the key.
Having given up the $30,000 handle at the start of the month, giving up the $20,000 handle could have a material impact on investor sentiment.
On Wednesday, the FOMC Rate Statement highlighted improving economic conditions in the second quarter. Talk of a recession has picked up, however. A Fed committed to tackling inflation raised doubts about the Fed achieving a soft landing.
Movement through this weekend could be pivotal, with several headwinds for investors to consider near term.
Fed rate hikes aligned with the FOMC projections will test investor nerves, with the updates from the SEC v Ripple case likely to influence investor sentiment.
A possible shift in the regulatory landscape and a decision on which authority will regulate the US market will also need consideration.
Bitcoin (BTC) Price Action
At the time of writing, BTC was up 1.23% to $20,595.
A bullish start to the day saw bitcoin rise to an early morning high of $20,615.
Bitcoin left the Major Support and Resistance Levels untested early on.
Technical Indicators
A BTC move through the $20,660 pivot would bring the First Major Resistance Level at $21,105 into play.
BTC would need plenty of support to return to $21,000.
An extended rally would test the Second Major Resistance Level at $21,779 and resistance at $22,000. The Third Major Resistance Level sits at $22,886.
Failure to move through the pivot would bring the First Major Support Level at $19,997 in play. In another extended sell-off, bitcoin could test the Second Major Support Level at $19,552 and support at $19,000.
The Third Major Support Level sits at $18,444.
Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. Bitcoin sits below the 50-day EMA, currently at $23,723. Today, the 50-day EMA slid back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA, bitcoin price negative.
A move through $22,500 would bring the 50-day EMA into play, a first test for the bitcoin bulls.