Bitcoin Jumps to Key Price Resistance as Hong Kong Opens Crypto Trading for Retail Investors

The crypto's short-term outlook also may depend on the ongoing U.S. debt ceiling drama.

AccessTimeIconMay 23, 2023 at 2:28 p.m. UTC
Updated May 23, 2023 at 2:34 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Bitcoin (BTC) rose to key price resistance early Tuesday as Hong Kong said retail investors could trade digital assets from June 1.

Hong Kong's Securities and Futures Commission (SFC) announced that it would accept applications from exchanges to offer crypto trading to retail investors from June 1, adding that approved tokens need a 12-month track record and substantial market capitalization. The SFC said registered exchanges would be barred from providing stablecoin and interest-bearing instruments.

The announcement is consistent with long-held expectations that developments in Asia will catalyze the next crypto bull run and contrasts the lack of regularity in the West, particularly in the U.S.

Bitcoin picked up a bid during the Asian hours and rose more than 2% to $27,500, probing the former support-turned-resistance of the horizontal trendline connecting the first and second trough of the head-and-shoulders (H&S) pattern. The cryptocurrency fell below the trendline early this month, confirming the H&S breakdown and opening doors for a deeper slide toward $25,000.

"This looks like a non-macro-related spot-based move, and the timing coincides with the news that Hong Kong will allow retail trading of BTC and ETH on licensed digital asset platforms as of June 1," Noelle Acheson, author of the Crypto Is Macro Now newsletter, said in Tuesday's edition. "This is not a total surprise – the ruling and the timing were largely expected. But confirmation matters more in a lacklustre market with headwinds coming from other vectors," Acheson added.

Per Acheson, Hong Kong's decision to green light crypto trading for retail investors does not mean there will be a flood of demand for cryptocurrencies, as local traders are probably already accessing the market through offshore venues. Nevertheless, the announcement is a "a welcome reminder that the crypto adoption pool is likely to grow considerably over the next year and beyond," Acheson noted.

Bitcoin rose to the H&S resistance early Tuesday. (TradingView)
Bitcoin rose to the H&S resistance early Tuesday. (TradingView)

Bitcoin needs to clear the H&S trendline resistance and the 20-day simple moving average at $27,500 to confirm a bull revival, according to Canada-based digital assets liquidity provider Secure Digital Markets.

"As long as prices remain below the neckline [horizontal trendline] of this [H&S] pattern as well as the 20-day moving average, we should expect further downside to $25,250 and posibly $24,000," wrote the analysts there.

Bitcoin's short-term outlook also depends on the ongoing U.S. debt ceiling drama and the dollar index's trajectory. Treasury Secretary Janet Yellen has warned that the government would run out of money in early June if a debt deal is not reached, opening doors for what many say would be a catastrophic default. Some analysts said a successful resolution of the debt ceiling drama might see the Treasury suck out liquidity from the market and put downward pressure on bitcoin.

Lastly, bond yields are rising in a sign of investors reassessing the possibility of the Federal Reserve continuing its rate hike campaign and keeping borrowing costs higher for longer.

The U.S. 10-year yield rose to more than a two-month high of 3.75% at press time, while the two-year jumped to 4.4%, the highest since March 13. Rising yields dent the appeal of risk assets like technology stocks and cryptocurrencies and zero-yielding assets like gold.

Edited by Stephen Alpher.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.

Read more about