FX.co ★ Technical Analysis of BTC/USD for January 30, 2023

Crypto Industry News:

The world's largest digital asset manager, Grayscale, will reportedly make its case in court over a potential Bitcoin ETF launch in the US on March 7. The US Securities and Exchange Commission (SEC) will oppose this.

Grayscale has repeatedly indicated its intention to introduce an exchange-traded fund (ETF) tracking Bitcoin performance in the United States, but so far to no avail. The SEC rejected the product's launch last June and reiterated its decision a few months later.

Craig Salm, Grayscale's chief legal officer, maintained in 2021 that the SEC may have a "clear vision" on ETFs, but should be more open about it. CEO Michael Sonnenshein went further, promising to sue the regulator for rejecting the company's initiative.

According to recent reports, the District of Columbia Court of Appeals ordered both parties to meet in court on March 7 to present their point of view. Grayscale previously expected the legal battle to begin in the second quarter of 2023.

The digital asset manager began pursuing its goal after the SEC approved ProShares ETF backed by Bitcoin futures (dubbed BITO) in October 2021.

Numerous problems in the cryptocurrency industry last year negatively affected Grayscale. Unlike some exchanges that provided proof of reserves after FTX collapsed, this one refused to do so, citing security concerns. The company also stated that its custodian partner Coinbase conducts "periodic on-chain validation."

Concerns have been raised that Grayscale could run into additional trouble as it is under the umbrella of the Digital Currency Group (DCG). One of its subsidiaries, Genesis, has already filed for bankruptcy.

Technical Market Outlook:

The BTC/USD pair keeps trading above 100 MA, nevertheless the recent rally had been capped at $23,950 after the Bearish Engulfing candlestick pattern was made at H4 time frame chart. A breakout above the level of $25,000 is needed in order to extend the rally towards the key mid-term technical resistance seen at $25,442. Please notice the growing bearish Divergence on the H4 time frame chart that pushed the price to the middle of the range already. On the other hand, any breakout below the range low ($22,330) would extend the corrective cycle towards the level of $21,466 (November 5th high). Strong and positive momentum support the short-term bullish outlook, however, the market is trading in a extremely overbought conditions.

Weekly Pivot Points:

WR3 - $24,554

WR2 - $23,983

WR1 - $23,640

Weekly Pivot - $23,412

WS1 - $23,069

WS2 - $22,842

WS3 - $22,271

Trading Outlook:

Despite the recent rally, the down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The gamechanging level for bulls is located at $25,442 and it must be clearly violated for a valid breakout in the longer term.