Bitcoin Bulls Take Aim: $30K in Sight and Under Fire

Coinbase Under Fire. SEC Issues Wells Notice.

As the initial quarter of 2023 reaches its end, we can safely say that Bitcoin has demonstrated exceptional performance and is on the brink of surpassing the $29,000 mark. After the Federal Reserve decided to increase interest rates by 25 bps on Wednesday, BTC encountered a decline, but rapidly recovered and is now approaching its next major hurdle: $30,000.

However, the course to success is likely to be difficult, but if the resistance level at $28,600 is breached, then it may pave the way for additional gains and result in a climb not witnessed since the crypto winter of 2022. The Fed expressed its hesitation to decrease rates this year, remarking that “additional policy firming may be appropriate.” It will be interesting to see the Fed’s next move, as it is guaranteed to influence the crypto market.

The U.S. Securities and Exchange Commission (SEC) issued a Wells notice to the cryptocurrency exchange Coinbase Global, yet the values of cryptocurrencies were largely unaffected. The notice cautioned the firm of an impending lawsuit for supposedly violating securities laws. A Wells notice is essentially a letter sent by the regulator, informing the respondent of allegations and allowing the accused to submit a written response.

The SEC also conveyed its concerns about other cryptocurrency trading platforms that may not adhere to federal securities laws and emphasized that the danger of loss for crypto investors “remains significant.” Some market participants perceive increased cryptocurrency regulation as a positive development because it shields investors from deceit and manipulation. This, subsequently, enhances the confidence of investors.

Technical Outlook – BTC/USD

After the bounce at $20K, Bitcoin acted like a rocket, shooting straight up and pausing near $29,000. This goes to show once again the crucial importance of the $20K level, which was discussed many times before.

The current rally reached a high at $28,936, thus coming very close to $29,000. In May 2022, BTC spent quite a while ranging near $29K, so this level has technical implications as well as psychological – big round numbers (BRNs) are considered psychological S/R levels.

So, what can we expect next? The elephant in the room is $30K, which will likely be touched if the bulls can smash the current barrier at $29K. But we have to take into consideration that the rally that started at $20K needs a ‘breather’.

The RSI entered overbought once again in a relatively short period and is now coming down, warning of a potential pullback. It’s also worth noting that BTC’s price is much higher than it was the last time the RSI entered into overbought territory. The RSI is lower. This is a sort of divergence, albeit not the textbook version. In other words, expect sunny days with a chance of showers; the main bias is bullish but pullbacks and/or sideways movements are not out of the question.