Bitcoin (BTC) Falls to sub-$27,500 with the Bears Eyeing $25,000

Key Insights:

• On Saturday, bitcoin (BTC) fell by 2.33% to end the day at sub-$28,500.
• Investors failed to move on from the US inflation figures on Friday, with the focus now moving on to the Fed monetary policy decision on Wednesday.
• The Bitcoin Fear & Greed Index saw a modest rise this morning, despite bitcoin falling for a fifth consecutive day.

On Saturday, bitcoin (BTC) fell by 2.3%. Following a 3.4% slide on Friday, bitcoin ended the day at $28,389.

A bullish morning saw bitcoin hit a high of $29,414 before hitting reverse.

Falling short of the First Major Resistance Level at $29,989, bitcoin slid to a day low of $28,105.

Bitcoin fell through the First Major Support Level at $28,492 to end the day in the deep red.

Market sentiment failed to improve this morning, with bitcoin facing the prospect of ending the week at the lowest level since the week ending December 21, 2020.

Market jitters over Fed monetary policy and the likely interest rate path trajectory to curb inflation continue to weigh.

The Bitcoin Fear & Greed Index Rises Amidst Sell-Off

Today, the Fear & Greed Index rose from 12/100 to 14/100. The modest increase came despite the ongoing bitcoin sell-off that led bitcoin down to sub-$27,500 for the first time since the May 12 sell-off fueled by the collapse of TerraUSD (USTC) and Terra LUNA.

While the Index increased, despite Saturday’s sell-off, the Index remains deep within the “Extreme Fear” zone, reflecting investor fear of further downside.

With bitcoin closely correlated with the NASDAQ 100, investors may need to wait until Monday for any shift in sentiment.

The threat of a more aggressive Fed interest rate path, however, could test appetite for riskier assets through to Wednesday’s decision.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 3.29% to $27,457.

A mixed start to the day saw BTC rise to an early morning high of $28,519 before sliding to a morning low of $27,183.

The extended sell-off saw BTC fall through the First Major Support Level at $27,860 and the Second Major Support Level at $27,330.

Technical Indicators

BTC will need to move through the First Major Support Level and the $28,636 pivot to target the First Major Resistance Level at $29,165.

BTC would need the broader crypto market to support a return to $29,000.

An extended rally would test the Second Major Resistance Level at $29,942 and resistance at $30,000.

Failure to move through the First Major Support Level and the pivot would leave the Second Major Support Level at $27,330 in play. In the event of an extended sell-off, bitcoin could test the Third Major Support Level at $26,015 before any recovery.

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 $29,549. The 50-day EMA fell back from the 100-day EMA. The 100-day EMA eased back from the 100-day EMA, bitcoin price negative.

A return to $29,000 would give the bulls a run at the 50-day EMA.