Bitcoin (BTC) Is on the way to Joining the NASDAQ in the Red for April

Key Insights:

• Bitcoin (BTC) looks set to end April in the red, which would be the first monthly decline since January.
• Risk aversion stemming from market sentiment towards Fed monetary policy and fears of a recession weighed.
• Bitcoin’s technical indicators continue to flash red, with Bitcoin sitting well below the 50-day EMA.

On Friday, Bitcoin (BTC) fell by 2.91%. Reversing a 1.28% gain from Thursday, Bitcoin ended the day at $38,594.

For April, Friday’s pullback left Bitcoin down 15.2% going into the final session of the month.

Bearish sentiment from the US equity markets spilled over the crypto market, with Bitcoin’s correlation with the NASDAQ heightened in April.

Bitcoin Fear & Greed Index Hits Reverse

This morning, the Fear & Greed Index fell from 23/100 to 20/100. The Index remained within the “Extreme Fear” zone. On Tuesday, Bitcoin briefly revisited the “Fear” zone, with the Index rising to 27/100 before the pullback.

In April, the Index had hit a month high of 53/100 on April 05, which coincided with Bitcoin revisiting $47,000 levels before sliding to a month low of $37,727.

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. At present, the Index reflects risk sentiment across the broader global financial markets.

Bitcoin Correlation with the NASDAQ 100 Strengthens

It was a bearish April for the US equity markets. A Friday sell-off left the majors in the red, with Amazon.com earnings adding to the market angst.

The NASDAQ 100 ended the month down 3.93%, with market sentiment towards Fed monetary policy and the economic outlook also influencing.

For crypto investors looking for an inflation hedge and an asset class free from central bank influence, there would have been some disappointment.

The correlation between Bitcoin and the NASDAQ 100 strengthened in April.

Bitcoin’s return to $47,000 levels in the first week of April coincided with the NASDAQ’s April high of 14,532.55 on April 04.

Bitcoin Price Action

At the time of writing, Bitcoin was up by 0.34% to $38,725.

Technical Indicators

Bitcoin will need to move through the day’s $38,900 pivot to target the First Major Resistance Level at $39,619. Bitcoin would need broader market support to break out from $39,500.

In the event of an extended rally, Bitcoin could test the Second Major Resistance Level at $40,645 and resistance at $41,000. The Third Major Resistance Level sits at $42,387.

Failure to move through the pivot would bring the First Major Support Level at $37,875 into play. Barring another extended sell-off, Bitcoin should avoid sub-$37,000. The Second Major Support Level at $37,155 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 $39,525. This morning, we saw the 50-day EMA pull back from the 100-day EMA, delivering downside pressure. The 100-day EMA also pulled back from the 200-day EMA, BTC negative.

A move through the 50-day EMA would support a run at $42,000.