Key Insights:
- On Thursday, BTC fell by 0.66% to end the session at $28,844.
- US economic indicators fueled recessionary fears, weighing on BTC and the broader crypto market.
- However, the technical indicators remained bullish, signaling a return to sub-$30,000.
On Thursday, bitcoin (BTC) fell by 0.66%. Partially reversing a 1.25% gain from Wednesday, BTC ended the day at $28,844.
A bullish start to the day saw BTC rise to a late-morning high of $29,412. Falling short of the First Major Resistance Level (R1) at $29,503, BTC fell to a late afternoon low of $28,701. However, steering clear of the First Major Support Level (S1) at $28,350, BTC revisited the $28,900 handle before easing back.
US Economic Indicators Fueled Recessionary Fears
It was a busy Thursday session, with US economic indicators, the banking sector, and the US government debt ceiling in focus.
The economic indicators delivered bearish signals, sending BTC into reverse. Initial jobless claims increased from 229k to 242k, with nonfarm productivity sliding by 2.7% in Q1. However, unit labor costs surged by 6.3%. Economists forecast nonfarm productivity to fall by 1.8% and unit labor costs to increase by 5.5%.
The latest numbers come one day after the US Federal Reserve hiked interest rates by 25 basis points to combat sticky inflation.
However, the ongoing banking crisis and US Government debt ceiling issues remain BTC tailwinds. BTC offers an alternative to depositors in fear of losing deposits, with a US Government default on payments likely to impact appetite for the Greenback.
The NASDAQ Composite Index also responded negatively to the economic indicators, with the government debt ceiling and banking sector being headwinds for the US equity markets. On Thursday, the NASDAQ fell by 0.49%.
The Day Ahead
US economic indicators will influence the afternoon. The all-important US Jobs Report will give investors another snapshot of the US economy. While wage growth will influence sentiment toward the Fed monetary policy outlook, a weak nonfarm payroll figure would fuel recessionary fears.
While the US Jobs Report will provide direction, investors should continue to monitor the crypto news wires and track SEC v Ripple case updates. Court rulings would likely limit the impact of the US Jobs Report.
Binance and Coinbase (COIN)-related news and regulatory activity would also move the dial.
Bitcoin (BTC) Price Action
This morning, BTC was up 0.24% to $28,912. A range-bound start to the day saw BTC fall to an early low of $28,844 before rising to a high of $28,912.
BTCUSD 050523 Daily Chart
Technical Indicators
Resistance & Support Levels
| R1 – $ | 29,270 | S1 – $ | 28,559 |
| R2 –$ | 29,697 | S2 –$ | 28,275 |
| R3 –$ | 30,408 | S3 –$ | 27,564 |
BTC needs to move through the $28,986 pivot to target the First Major Resistance Level (R1) at $29,270 and the Thursday high of $29,412. A return to $29,000 would signal an extended bullish session. The crypto news wires and the US Jobs Report 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 $29,697 and resistance at $30,000. The Third Major Resistance Level (R3) sits at $30,408.
Failure to move through the pivot would leave the First Major Support Level (S1) at $28,559 in play. However, barring a crypto event-fueled sell-off, BTC should avoid sub-$28,000. The Second Major Support Level (S2) at $28,275 should limit the downside. The Third Major Support Level (S3) sits at $27,564.
BTCUSD 050523 Hourly Chart
Looking at the EMAs and the 4-hourly candlestick chart (below), it was bullish signals. BTC sat above the 50-day EMA ($28,746). The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, sending bullish signals.
A hold above the 50-day EMA ($28,746) would support a breakout from R1 ($29,270) to give the bulls a run at R2 ($29,697) and $30,000. However, a fall through the 50-day ($28,746) and 100-day ($28,726) EMAS would bring S1 ($28,559) and the 200-day EMA ($28,392) into view. A BTC fall through the 50-day EMA would send a bearish signal.
