Bitcoin (BTC) Slides after Brief Test of Resistance at $45,000

Key Insights:

• Bitcoin (BTC) slides back to sub-$42,000 after briefly revisiting $45,000 levels on Wednesday.
• Russia’s extended invasion of Ukraine and sanctions have put cryptos back in the spotlight.
• Governments are placing greater pressure on crypto exchanges to ban Russian users. It could be a no-win situation for the crypto market.

It was a bearish day for Bitcoin (BTC) on Thursday.

Bitcoin briefly hit a day high of $44,079 before sliding to a day low of $41,852, with Bitcoin losing its “Risk-off” status once more.

Following a 1.11% fall on Wednesday, Bitcoin declined by 3.33% to end the day at $42,474.

It was a bearish session for the rest of the crypto top 10.

AVAX and SOL led the way down, with losses of 5.15% and 5.89%, respectively.

ADA (-4.04%) and ETH (-3.90%) also struggled, with XRP (-2.19%), LUNA (-1.99%)  BNB (-1.66%) seeing relatively modest losses.

Bitcoin Fear & Greed Index Hits Reverse

After briefly returning to the “Neutral” zone, the Bitcoin Fear & Greed Index continued to fall this morning. The index fell from a Thursday 39/100 to 33/100 in response to Bitcoin’s 2^nd consecutive day in the red on Thursday and a bearish start to Friday. The reversal saw the index fall back into the “Fear” zone.

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.

After decoupling from the NASDAQ 100 and other riskier assets, Bitcoin has succumbed to market forces.

Greater government scrutiny over crypto exchanges and Russian users has added pressure on the crypto market. Expectations of sweeping bans on users that could extend to users in Russian-friendly nations are market negative.

This week, the White House’s National Security Council and the Treasury Department issued an order to the largest crypto exchanges. According to the report, the Biden Administration has requested that crypto exchanges “ensure that Russians do not use crypto as an escape.”

In response to Russia’s extended invasion of Ukraine, the NASDAQ 100 fell by 1.56%, while the U.S. Dollar Spot Index climbed by 0.26% to 98.037. Gold Spot ended the day up by 0.32% to $1,934.95.

Bitcoin Price Action

At the time of writing, Bitcoin was down by 2.04% $41,606.

Technical Indicators

Bitcoin will need to move through the $42,809 pivot to make a run on the First Major Resistance Level at $43,753. Bitcoin would need broader market support to break through to $43,500.

In the event of another extended rally, the Second Major Resistance Level at $45,025 would come into play. The Third Major Resistance Level sits at $47,256.

Failure to move through the pivot would bring the First Major Support Level at $41,524 into play. Barring an extended sell-off throughout the day, Bitcoin should avoid sub-$40,000 levels. The Second Major Support Level at $40,472 should limit the downside.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bullish signal. Bitcoin continues to sit above the 50-day EMA. The 50-day EMA has pulled away from the 200-day after the bullish cross through the 200-day EMA earlier this week. A bullish cross of the 100-day EMA through the 200-day EMA would bring the Major Resistance levels into play.

Avoiding the 50-day EMA, currently at $41,395, would provide support.