Bitcoin (BTC) Faces Real Prospect of a Return to sub-$30,000

Key Insights:

• Last week, bitcoin (BTC) tumbled by 11.6%, to end the week at $34,034, with the Fear & Greed Index suggesting more losses to come.
• News of bitcoin whales offloading BTC added to the market angst, with US Futures pointing to another testy day ahead.
• Bitcoin’s technical indicators continue to flash red, with Bitcoin sitting well below the 50-day EMA.

On Sunday, bitcoin (BTC) fell for a fourth consecutive day, with investors unable to shake off the bearish sentiment that kicked in on Thursday.

Following a 1.50% decline on Saturday, bitcoin fell by 4.05% on Sunday, to end the week down by 11.6% to $34,034.

A bearish weekend saw BTC fall to a Sunday low of $33,732, a first visit to sub-$34,000 since January’s current year low of $32,991.

Bitcoin Fear & Greed Index hits reverse

This morning, the Fear & Greed Index fell deeper into the “Extreme Fear” zone. The Index fell from 18/100 to 11/100.

The “Extreme Fear” zone reflects investor expectations of further price deterioration and is aligned with the technical indicators.

In late March, the Index hit a current year high of 60/100, recovering from a January 8 current year low of 10/100.

With the Index sitting just above the current year low, which preceded bitcoin’s slide to a current year low of $32,991, downside risk remains. Bitcoin faces the prospect of a return to sub-$30,000 for the first time since July 2021.

NASDAQ-Bitcoin correlation to test investor resilience

At the time of writing, the NASDAQ 100 Mini was down 140 points, painting a grim picture for the day ahead.

With the correlation between bitcoin and the NASDAQ strengthening, the crypto market could be in for a tough day ahead.

Another bearish US equity market session could force bitcoin whales to further reduce bitcoin holdings, which would add further downward price pressure.

Bitcoin (BTC) price action

At the time of writing, BTC was up by 0.17% to $34,093. A mixed start to the day saw BTC fall back to sub-$34,000, before finding support.

Technical indicators

BTC will need to move through the day’s $34,421 pivot to target the First Major Resistance Level at $35,116. BTC would need broader market support to break out from $34,500.

In the event of an extended rally, BTC could test the Second Major Resistance Level at $36,193. The Third Major Resistance Level sits at $37,965.

Failure to move through the pivot would bring the First Major Support Level at $33,344 into play. Barring another extended sell-off, BTC should avoid sub-$33,000 and January’s current year low of $32,991. The Second Major Support Level sits at $32,657.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. BTC sits below the 50-day EMA, currently at $36,829. This morning, we saw the 50-day EMA pull back from the 100-day EMA, delivering downside pressure. The 100-day EMA also fell back from the 200-day EMA, BTC negative.

A move through the 50-day EMA would support a look at $38,000, while a fall through January’s low would bring sub-$30,000 into play.