It was a bearish Monday, with BTC slipping 0.11% to end the day at $21,773. Regulatory risk and the SEC move against Paxos and Binance USD (BUSD) weighed on investor sentiment.
On Monday, bitcoin (BTC) fell 0.11%. Following a 0.32% drop on Sunday, BTC ended the day at $21,773m below $22,000, for the fifth session in a row.
After a choppy start to the day, BTC surged to a mid-morning high of $21,905. Missing the first major resistance level (R1) at $22,039, BTC slid to a late-afternoon low of $21,354. BTC briefly fell through the first major support level (S1) at $21,609 and the second major support level (S2) at $21,423, before ending the day at $21,773.
SEC Move Against Paxos and Binance USD Left BTC in the Red
There were no US economic indicators to distract investors on Monday. Following the news that Kraken has reached a settlement with the SEC and the cessation of US cryptocurrency staking services, Paxos and Binance USD (BUSD) became the latest targets of the SEC.
On Monday, news came that the SEC was preparing to sue Paxos over the issuance and listing of Binance USD (BUSD). The SEC cited that the company violated investor protection laws.
Paxos issued a statement in response to Wells’ notice, saying it is prepared to litigate if necessary. Paxos also stated that it categorically disagrees with the SEC staff that BUSD is not a security under federal securities laws.
The SEC’s moves against cryptocurrency staking and stablecoins will create even more investor uncertainty and market volatility. However, BTC’s downside was modest, with the NASDAQ Composite Index providing support ahead of today’s US CPI report. On Monday, the NASDAQ rose 1.48%.
Bitcoin (BTC) Price Action – Technical Indicators
BTC was down 0.07% to $21,757. A mixed start to the day saw BTC drop to an initial low of $21,739 before rising to a high of $21,805.
BTC needs to avoid a drop through the $21,677 pivot to target the first major resistance level (R1) at $22,001. A return to $22,000 would signal a breakout session. Crypto news wires and US stats need to be crypto-friendly to support a prolonged rally.
In the event of a prolonged rally, BTC would likely test the second major resistance level (R2) at $22,228. The third major resistance level (R3) sits at $22,779.
A drop through the pivot would bring the first major support level (S1) into play at $21,450. However, barring another risk-driven cryptocurrency selloff, BTC should avoid less than $21,000. The second major support level (S2) at $21,126 should cap the downside. The third major support level (S3) sits at $20,575.
A hold above the 200-day EMA (21,714) would support a break from R1 ($22,001) to target the 50-day EMA ($22,201) and R2 ($22,228). However, a drop through the 200-day EMA ($21,714) would bring S1 ($21,450) and less than $21,000 into view. A move through the 50-day EMA would send a bullish signal.
By Audy Castaneda
