Hawkish FED Minutes Sink Bitcoin (BTC) and the Broader Crypto Market

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Published: Apr 7, 2022, 01:13 GMT+00:00

Bitcoin (BTC) and the broader market hit reverse in response to Wednesday's FOMC meeting minutes. A return to $45,000 would shift sentiment.

Key Insights:

A Wednesday sell-off left Bitcoin (BTC) down 5.11%.
Hawkish FOMC meeting minutes left the U.S equity markets and the broader crypto market in the red.
Technical indicators are bearish, with BTC sitting below the 200-day EMA.

On Wednesday, Bitcoin (BTC) slid by 5.11%. Following a 2.38% loss from Tuesday, BTC ended the day at $43,178.

Bearish from the start of the day, Bitcoin slid from an early morning high of $45,518 to a final hour intraday low of $43,130.

The reversal saw Bitcoin fall through the day’s First Major Support Level at $44,861 and the Second Major Support Level at $44,219.

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

SOL (-11.00%) and ADA (-10.08%) led the way down, with AVAX (-8.76%), ETH (-7.00%), LUNA (-7.16%), and XRP (-7.03%) also seeing heavy losses.

BNB fell by a more modest 5.51%.

Bitcoin Fear & Greed Index Hits Reverse

Following Tuesday’s pullback to 48/100, the Bitcoin Fear & Greed Index tumbled to 34/100 on Wednesday.

The slide saw the index fall into the ‘Fear Zone’, as the markets reacted to the overnight FOMC meeting minutes.

On Wednesday, the FOMC meeting minutes revealed the FED’s plans to reduce the balance sheet by $95bn per month. The markets responded negatively, with interest rates on the rise and an aggressive balance sheet reduction plan now in play.

Across the U.S equity markets, the NASDAQ 100 followed Tuesday’s 2.26% loss with a 2.22% decline.

For a Bitcoin move through to $50,000, the index would need to return to 54/100 and the ‘Greed’ zone.

Bitcoin Price Action

At the time of writing, Bitcoin was up by 0.84% to $43,540. A mixed start to the day saw Bitcoin fall to an early morning low of $43,129 before striking a high of $43,561.

Bitcoin will need to avoid sub-$43,000 to support a recovery of Wednesday’s losses.

Technical Indicators

Bitcoin will need to move through the day’s $43,940 pivot to make a run on the First Major Resistance Level at $44,754. Bitcoin would need broader market support to return to $44,500 levels.

In the event of another extended rally, Bitcoin could test the Second Major Resistance Level at $46,333 and resistance at $46,500. The Third Major Resistance Level sits at $48,718.

Failure to move through the pivot would bring the First Major Support Level at $42,360 into play. Barring another extended sell-off, Bitcoin should avoid sub-$42,000. The Second Major Support Level sits at $41,558.

A move through the 200-day EMA would bring $45,000 into play.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. Bitcoin sits below the 200-day EMA, currently at $43,592. This morning, the 50-day EMA narrowed to the 100-day EMA, testing support. The 100-day EMA narrowed to the 200-day EMA, which was BTC negative.

A move back through the 200-day EMA would support a return to $45,000 levels.

Failure to move back through the 200-day EMA would leave BTC under pressure.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.