Bitcoin (BTC) and the Broader Market Slide as Risk Aversion Bites

Key Insights:

• On Sunday, Bitcoin (BTC) rose for just the first time in 5-sessions.
• Market sentiment towards Fed monetary policy left Bitcoin and the broader crypto market on the defensive.
• Bitcoin’s technical indicators continue to flash red, with Bitcoin sitting well below the 50-day EMA.

On Sunday, Bitcoin (BTC) rose by 0.05%. Following a 0.68% decline from Saturday, Bitcoin ended the week down 0.56% to $39,466.

Last week, Bitcoin came under renewed selling pressure with market sentiment towards inflation and Fed monetary policy testing support for riskier assets.

It was a mixed Sunday session for the broader crypto market.

LUNA joined Bitcoin in positive territory, rising by 0.95%. It was a bearish session for the rest of the majors, however.

AVAX and SOL declined by 1.84% and 1.41%, respectively.

ADA (-0.11%), BNB (-0.52%),  ETH (-0.39%), and XRP (-0.93%) saw relatively modest losses.

Bitcoin Fear & Greed Index Hits Reverse

This morning, the Fear & Greed Index stood at 23/100. Despite Bitcoin’s brief return to $42,900 last week, the Index has remained within the “Extreme Fear” and “Fear” zones since April 07.

The “Fear” and “Extreme Fear” zones reflect investor expectations of further price deterioration.

For the Bitcoin bulls, the Index will need to move back through to 46/100 to bring April’s high of $47,433 into play.

Across the global financial markets, the NASDAQ 100 mini was down 102.25 points this morning, with the Dow mini sliding by 267 points.

Last week, the NASDAQ 100 slid by 3.83%, with a 2.55% tumble on Friday doing the damage.

Earnings and Fed policy sank the US majors in the week, which spilled over to the crypto market. From the top 10 cryptos, LUNA bucked the market trend, rising by 16.8%.

This week, sentiment toward Fed monetary policy will continue to leave the crypto market under pressure.

News updates on China’s latest COVID-19 lockdown measures and the war in Ukraine are the key drivers as the global financial markets fret over supply chain disruption.

On the economic calendar, there are several key US stats to consider. On Tuesday, consumer confidence figures and Q1 GDP numbers on Thursday will draw attention ahead of inflation numbers on Friday.

Ultimately, the question will be whether the markets have been overly hawkish on the Fed’s interest rate trajectory to curb inflation.

Bitcoin Price Action

At the time of writing, Bitcoin was down by 0.93% to $39,101. A bearish start to the week saw Bitcoin slide to an early morning low of $38,753.

Bitcoin fell through the First Major Support Level at $39,026 before finding support.

Technical Indicators

Bitcoin will need to move through the day’s $39,482 pivot to target the First Major Resistance Level at $39,922. Bitcoin would need broader market support to break out from $39,500.

In the event of another extended rally, Bitcoin could test the Second Major Resistance Level at $40,384. The Third Major Resistance Level sits at $41,282.

Failure to move through the pivot would bring the First Major Support Level at $39,026 into play. Barring an extended sell-off, Bitcoin should avoid sub-$38,000. The Second Major Support Level at $38,586 should limit the downside.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. Bitcoin sits below the 50-day EMA, currently at $40,366. This morning, we have seen the 50-day EMA pull further back from the 100-day EMA, delivering downside pressure.

A move through the 50-day EMA would support a run at last week’s high of $42,997.

Broader Crypto Market Hits Reverse

Elsewhere, XRP slid by 2.97% with ADA (-2.60%) and ETH (-2.03%) close behind.

AVAX (-1.96%), BNB (-1.20%), SOL (-1.91%), and Terra (-1.47%) also struggled, however.