Bitcoin (BTC) Sees More Downside Risk With $40,000 Looking Elusive

Key Insights:

• Bitcoin (BTC) fell for a 4^th session from 5 on Sunday.
• Negative sentiment towards crypto oversight remains a market negative.
• Risk aversion from Russia’s invasion of Ukraine also continues to test support for the crypto market.

Bitcoin (BTC) resumed its losing streak on Sunday, falling for the 4^th day in 5. Once more, Bitcoin failed to break through to $40,000. Bitcoin hit a day high of $39,687 before sliding to a day low of $38,134. Support at $38,000 continued to be the key to avoiding heavier losses.

Things were not much better for the broader crypto market that had found some respite on Saturday.

LUNA tumbled by 8.94% to lead the way down, with AVAX (-5.54%), ADA (-4.86%), ETH (-4.31%), and SOL (-5.63%) also on the slide.

BNB (-2.47%) and XRP (-3.90%) saw relatively modest losses.

Bitcoin Fear & Greed Index Hits Reverse

This morning, the Fear & Greed Index rose from 22/100 to 23/100. Despite the rise, the Index remained within the “Extreme Fear” zone. Last week, the Index had visited 50/100 levels and the “Neutral” zone before the reversal.

For the Bitcoin bulls, the Index will need to move back through to 54/100 to bring $50,000 levels back into play for Bitcoin. A fall to sub-20/100 would deliver sub-$30,000 levels.

Concerns over Russia circumventing sanctions via the crypto market continues to deliver market uncertainty. Government scrutiny will pressure the markets as regulators look for questionable Russian crypto transactions. After declining to impose blanket bans on Russian users last week, Binance, Coinbase, FTX, and Kraken will likely see greater regulatory scrutiny.

Bitcoin Price Action

At the time of writing, Bitcoin was down by 0.31% to $38,311.

Technical Indicators

Bitcoin will need to move through the day’s $38,750 pivot to make a run on the First Major Resistance Level at $39,329. Bitcoin would need broader market support to move back through to $39,000.

In the event of another extended rally, Bitcoin could test the Second Major Resistance Level at $40,304. The Third Major Resistance Level sits at $41,856.

Failure to move through the pivot would bring the First Major Support Level at $37,819 into play. Barring an extended sell-off, Bitcoin should avoid sub-$37,500. The Second Major Support Level at $37,819 should limit the downside.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. Bitcoin continues to sit below the 50-day EMA. On Sunday, we saw bearish crosses weigh on Bitcoin. The 50-day EMA crossed through the 200-day and the 100-day EMA. This morning, we have seen the 50-day EMA pullback from the 100-day EMA delivering more downside pressure.

A move through the 50-day EMA, currently at $40,300, would provide support.