It was a bearish Wednesday session, with BTC shedding 1.67% to end the day at $24,321. US economic indicators were not supportive, with fears that a banking crisis would affect riskier assets. Technical indicators remain bullish, with $26,000 in sight.
On Wednesday, Bitcoin (BTC) fell 1.67%. Partially reversing a 2.28% gain on Tuesday, BTC ended the day at $24,321. Significantly, it ended a four-day winning streak.
After a hectic morning, BTC surged to a high of $25,324 at midday before pulling back. Missing the first major resistance level (R1) at $26,156, BTC fell to a late-afternoon low of $23,931. However, moving away from the first major support level (S1) at $23,687, BTC found late support to close the day at $24,321.
Risk Aversion Sent Bank Stocks and BTC into the Red
Global financial markets took a hit on Wednesday as investor attention turned to the banking sector. Investor focus shifted from US regional banks to Credit Suisse. The Saudi National Bank, Credit Suisse’s largest shareholder, declared that it would not provide any further financial assistance, sending the share price to a new all-time low.
On Wednesday, Credit Suisse fell 24.24% to close the day at 1.70 Swiss francs. The news sent stock markets in Europe and the US into a fiery red, affecting BTC and the broader crypto market.
However, the Swiss National Bank provided relief to the market on Wednesday night, announcing that it would provide additional liquidity if needed. The Swiss central bank also stressed that Credit Suisse meets all capital and liquidity requirements.
US economic indicators also eased bets on a less aggressive Fed. US retail sales and wholesale inflation figures failed to impress. The producer price index fell 0.1% in February against an expected increase of 0.3%. Retail sales figures were more disappointing, falling 0.4% in February versus an expected drop of 0.3%. Retail sales rose 3.2% in January.
The numbers were good enough to cement a 25 basis point Fed rate hike in March and raise prospects for a pause in rate hikes. We also expect the Fed to consider the impact of interest rate hikes on the banking sector, with Silicon Valley Bank (SIVB) and Signature Bank (SBNY) falling victim to the Fed’s commitment to target inflation.
On Wednesday, the NASDAQ Composite Index rose 0.05%, while the Dow and S&P 500 posted losses of 0.87% and 0.70%, respectively. This morning, the NASDAQ mini was up 19.25 points.
Bitcoin (BTC) Price Action – Technical Indicators
BTC needs to move through the $24,525 pivot to target the first major resistance level (R1) at $25,120 and Wednesday’s high of $25,324. A return to $25,000 would indicate a prolonged bullish session. Crypto news leads and economic data must be crypto to support a prolonged rally.
In the event of a prolonged rally, BTC would likely test the second major resistance level (R2) at $25,918. The third major resistance level (R3) sits at $27,311.
BTC settled above the 50-day EMA ($22,960). The 50-day EMA has turned away from the 100-day EMA, and the 100-day EMA has turned away from the 200-day EMA, sending bullish signals.
A hold above the 50-day EMA ($22,960) would support a break of R1 ($25,120) to target R2 ($25,918) and $26,000. However, a drop-through S1 ($23,727) would bring the view S2 ($23,132) and the 50-day EMA ($22,960). A drop through the 50-day EMA ($22,960) would send a bearish signal.
By Audy Castaneda