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Bitcoin (BTC) briefly flashed above the $29,000 mark on Thursday, hitting new highs for 2023. This comes amid increased crackdowns by US regulatory agencies on crypto exchanges and other businesses in the space, resulting in fear, uncertainty, and doubt (FUD) amongst investors.
According to data from TradingView and CoinMarketCap, the Bitcoin price reached $29,191 on Binance, revisiting levels last seen in November last year, just before the collapse of Sam Bankman-Fried's FTX crypto exchange.
The increase in the price of the flagship cryptocurrency comes in the wake of regulatory crackdowns on crypto firms. On March 27, the US Commodity Futures Trading Commission (CFTC) charged Binance, its CEO Changpeng Zhao and its former CCO Samuel Lim of violating trading and derivatives laws.
Following the news, the big crypto tanked by 6.5% losing the support provided by the $28,000 psychological level. Binance's inhouse token, Binance Coin (BNB), dropped as much as 8% from $330 to lows of around $300 on the same day.
The regulatory crackdown claimed its new victim on March 29 as the US Securities and Exchange Commission (SEC) announced charges against the crypto asset trading platform Beaxy and its executives. The regulator claims that Beaxy failed to register as a national securities exchange, broker and clearing agency. The SEC also charges the Beaxy founder for raising $8 million with an unregistered asset BXY and misappropriation of at least $900K for personal use.
This marks the second major lawsuit on a crypto company this month and the fourth in the span of two months, including the charges the SEC announced against the now-apprehended Terraform Labs founder Do Kwon
The fact that BTC's price has grown amid such bearish developments has surprised many market commentators. This is because some believe the Binance lawsuit will only result in minor fines for the largest crypto exchange by transaction volume.
Note that the Bitcoin Fear and Greed Index, which numerically tracks current "emotions and sentiments" in the crypto market,has been increasing steadily over the last month, despite the turmoil in the global banking sector.
According to data from Alternative, this index has gone back to the "Greed" zone, suggesting that investors are buying more.
Some analysts attribute the recent bullish trend displayed by Bitcoin to buying by large-volume traders, which was more related to their buying strategies than fundamentals.
BTC price action has created a bullish flag on the daily chart (below). This is a highly bullish pattern that signals the continuation of an uptrend. It was formed when Bitcoin bounced off the 200-day Simple Moving Average (SMA) at $19,718, and rose sharply (46%), before correcting to areas below $27,500.
The correction is usually believed to be an opportunity for buyers to take a breather while allowing late investors to get in on the minor dip, before the uptrend continues. It is usually confirmed when a close is achieved above the flag. The target is set by measuring the percentage increase represented by the flag's post and adding it to the point of break out above the flag.
The chart below shows that Bitcoin escaped from the flag on March 29 paving the way for a massive move upward. As such, BTC's price may grow from the current levels, with the first barrier arising from today's intraday high of $29,191. Clearing this hurdle would clear the path for the pioneer cryptocurrency to move toward the technical target of the prevailing chart pattern at $40,113. Such a move would represent a 40% uptick from the current price.
Supporting Bitcoin's bullish outlook was the up-facing moving averages and the position of the Relative Strength Index (RSI) in the positive region. The price strength at 66 suggested that the bulls were in control of the BTC price.
In addition, the Moving Average Convergence Divergence (MACD) indicator was moving above the zero line in the positive region. Note that this trend-following indicator abandoned a sell signal on March 29, suggesting that the recent uptrend was strong. The position of the MACD in the positive region shows that the market still favors the upside.
Conversely, things could go awry for the largest cryptocurrency by market capitalization if the price turns down from the current levels to produce a daily candlestick close below $28,000. Such a move would trigger sell orders that could see Bitcoin retreat to $27,500 or $25,000.
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