This week has been a relatively quiet one for Bitcoin and cryptocurrency markets in general, with prices exhibiting low volatility amid fading investor interest. Much of the observed numbness is caused by the uncertainty in their regulatory framework, which has shifted funds towards traditional risky assets like stocks. Meanwhile, the macroeconomic backdrop does not seem to be providing any aid as inflationary pressures are starting to reappear, underscoring the case of interest rates staying higher for longer.

Risky assets under pressure

Latest macroeconomic developments appear to be negative for cryptocurrencies and risky assets in general. On Wednesday, the ISM non-manufacturing PMI unexpectedly climbed to its highest level since February, highlighting once again the remarkable resilience of the US economy and its relative outperformance against major peers.

Generally, risky assets benefit when the economy is in a good shape, but this time around things are a little bit different. The latest surge in energy prices could easily translate into stickier inflation, urging central banks to be more aggressive on their monetary tightening campaign. Of course, this could be difficult for countries that also face growth challenges, but the Fed could adopt the higher for longer narrative as the economy currently appears to be able to sustain a period of high interest rates.

Besides impacting risky assets directly, elevated interest rates could also boost the greenback whose price is inversely related to that of Bitcoin. The negativity surrounding the sector is also visible in the famous Bitcoin Fear and Greed index, which has been hovering below its 50-neutral threshold since September 1.

Regulatory clouds

Apart from the bearish macro picture for risk-sensitive assets, digital coins are also grappling with regulatory woes. Grayscale Investments has repeatedly urged the Securities and Exchange Commission (SEC) to greenlight its spot-Bitcoin ETF application since its court victory against the agency.

However, the SEC seems unwilling to do so, depriving the crypto space from the sole bullish catalyst that currently exists. The regulatory body has already approved ETFs that track Bitcoin futures trading on the Chicago Mercantile Exchange, which of course offers greater safety and soundness than traditional crypto exchanges. So, the big question that lies ahead is why the SEC does not approve spot ETFs on condition that involved exchanges follow the same requirements as their regulated counterparts.

Impending death cross could spell trouble

From a technical perspective, BTCUSD remains stuck in a tight range around the $26,000 mark. Nevertheless, the descending 50-day simple moving average (SMA) is closing the gap with the 200-day SMA, where a potential death cross may lead to a vast selloff.

To the downside, if bearish pressures persist, the price could re-test the recent support of $25,270 ahead of the June low at $24,750.

Alternatively, should the price reverse higher, the March support of $26,650 might serve as immediate resistance. A break above that zone could open the door for the August resistance of $28,140.