Bitcoin falters after hailing Biden's crypto executive order

By David Pichodo 

Investing.com - Bitcoin surprised positively early yesterday morning, gaining about $2,000 in a few hours, after the US Treasury leaked a bit too early (reassuring) details of President Biden's executive order on cryptocurrencies, which was officially unveiled last night.

The executive order will require federal agencies to take a unified approach to cryptocurrency regulation, tasking them with working together to address crypto risks - including consumer protection issues, national security implications and threats to the financial system.

But the text also calls for supporting innovation in cryptocurrencies and ensuring that the U.S. maintains "technological leadership in this rapidly growing space," a constructive mention that seems to be driving the enthusiasm of crypto investors.

It's more of a relief, when many feared the order would call for sweeping regulatory crackdowns on cryptocurrency.

Indeed, major players in the crypto industry shared their positive analysis of Biden's executive order on Twitter (NYSE:TWTR). Sam Bankman-Fried, CEO of crypto currency exchange FTX, called the executive order "constructive." Circle CEO Jeremy Allaire praised the executive order's focus on the rapid growth of crypto and its calls for a "constructive resolution of the issues around the known risks that exist with the legacy financial system."

In the end, it was the lack of bad news that seems to have been welcomed on Bitcoin yesterday.

It's also worth noting that risk appetite was the dominant theme yesterday, with European stock markets in particular exploding higher, posting their best day in more than two years, a backdrop that also helped Bitcoin rise.

As for today, two major events are likely to influence Bitcoin and other markets. The ECB meeting is expected this afternoon, as well as US inflation figures, which are expected to push the envelope once again, with annual CPI expected to be 7.9%.

Bitcoin's profile remains downgraded from a chart perspective.

From a technical perspective, Bitcoin's rise yesterday, despite its magnitude, unfortunately did not radically improve the crypto currency's chart profile. Moreover, BTC/USD is currently trimming its gains, falling back below $41,000 at the time of writing, after peaking at over $42,600 yesterday morning.

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Ultimately, the area around $42,000 is to be considered as immediate resistance, before a more significant obstacle on the 100-day moving average, currently at $43,525. Recall that this moving average had stopped Bitcoin's rise and sent the crypto lower on March 2.

And even a return above this 100-day moving average would not be enough for us to start talking about a bullish reversal of the daily trend. Indeed, the study of the chart shows that this reversal will only begin to be validated in case of a return above the $45,500 area.