Bitcoin (BTC) Slides to sub-$25,000 with the Bears Eyeing $20,000

Key Insights:

• On Sunday, bitcoin (BTC) slid by 6.35% to end the week down by 11.1%.
• Market angst over US inflation, the global economic outlook, and Fed monetary policy weighed heavily on the crypto majors throughout the weekend.
• The Bitcoin Fear & Greed Index saw a modest decline this morning despite bitcoin falling for a sixth consecutive day.

On Sunday, bitcoin (BTC) slid by 6.35%. Following a 2.3% decline on Saturday, bitcoin ended the week down 11.1% to $26,587.

A mixed morning saw bitcoin strike an early morning high of $28,519 before hitting reverse.

Falling short of the Major Resistance Levels, bitcoin slid to a final hour low of $26,571.

The reversal saw bitcoin fall through the First Major Support Level at $25,932 to end the day at $26,500 levels.

Following the US inflation figures on Friday, market sentiment failed to improve over the weekend.

The latest spike in US inflation supports a more aggressive interest rate path for the Fed to curb inflation.

Market conditions did not improve this morning, with investors looking ahead to the Fed monetary policy decision and projections on Wednesday.

The Bitcoin Fear & Greed Index Rises Amidst Sell-Off

Today, the Fear & Greed Index fell from 14/100 to 11/100. The modest fall came despite the extended crypto sell-off that saw bitcoin fall to sub-$25,000 for the first time since December 2020.

While sitting deep within the Extreme Fear zone, the Index avoided May’s low of 8/100.

Following last week’s close correlation with the NASDAQ 100, the futures market weighed on bitcoin early this morning.

Concerns over China’s demand for crude oil weighed on WTI crude oil prices, softening bitcoin’s inverse correlation with WTI, however, as shown by the chart below.

At the time of writing, the NASDAQ 100 Mini was down 357 points, pointing to a bearish start to the US session. WTI Crude was down 1.95% to $118.32.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 7.00% to $24,726.

A bearish morning saw BTC slide to a morning low and a current-year low of $24,586.

The extended sell-off saw BTC slide through the First Major Support Level at $25,932 and the Second Major Support Level at $25,274.

Technical Indicators

BTC will need to move through the Major Support Levels and the $27,227 pivot to target the First Major Resistance Level at $27,878.

BTC would need the broader crypto market to support a return to $27,500.

An extended rebound would test resistance at $29,000 and the Second Major Resistance Level at $29,174.

Failure to move through the Major Support Levels and the pivot would leave the support at $24,000 in play. In the event of an extended sell-off, bitcoin could test the Third Major Support Level at $23,334 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 $28,831. This morning, the 50-day EMA slid back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA, bitcoin price negative.

A return to $27,500 would give the bulls a run at the 50-day EMA. Near-term, however, price action remains in the hands of the Fed.