Regulatory Chatter and Tensions in Eastern Europe Hit Bitcoin (BTC)

Bitcoin (BTC) saw a 2-day mini winning streak come to an end on Wednesday. Reversing a 0.59% gain from Tuesday, Bitcoin slid by 4.54% to end the day at $36,964.

For the Bitcoin bulls, 8 days in the green from 11 sessions will be of little consolation. Bitcoin was rangebound ahead of the latest pullback. Failing to revisit $40,000 levels weighed on Bitcoin and the broader crypto market.

Regulators and Geopolitics Weigh on Bitcoin and the Pack

Bitcoin decoupled from the NASDAQ on Wednesday. While Bitcoin and the broader market saw deep red, the NASDAQ 100 wrapped up the day in positive territory. The decoupling may be temporary, however, with the NASDAQ 100 mini down 315 points at the time of writing.

Regulatory chatter on cryptos has continued to delay a Bitcoin return to $40,000 levels. On Wednesday, news of more governments announcing plans to regulate the crypto market dragged.

There were also reports of trading volumes surging in India mid-week following the government’s announcement of a 30% crypto tax. It remains to be seen whether investor reaction was favorable to the tax plans or last chance saloon for traders before the 30% tax becomes law. While volumes jumped, the Indian government has increased crypto scrutiny at the turn of the year. Ultimately, however, the market awaits the White House Executive Action, which may become the blue print for a unified global regulatory framework.

While crypto regulation has been a key driver in recent months, rising tensions over Russia and the Ukraine have also tested support for the majors. News of the U.S ordering close to 3,000 troops to Eastern Europe to “counter Russia” was market negative.

The Bitcoin Fear & Greed Index

Bitcoin’s slide on Wednesday led to another pullback in the Bitcoin Fear & Greed Index. Having recovered to 28/100 on Wednesday to sit just short of January’s high 29/100, the Index has now fallen back to 20/100.

Bitcoin’s failure to revisit $40,000 levels has left the Index in the red zone, which indicates fear of further Bitcoin losses. The Index had last sat outside of the red zone back on 28^th December (41/100).

Bitcoin Price Action

At the time of writing, Bitcoin was up by 1.33% to $37,455. A move through the day’s $37,500 pivot would support a run at Tuesday’s high $38,883. Bitcoin would need plenty of support, however, to breakout from the first major resistance level at $38,348 and resistance at $38,500.

An extended crypto rally, however, would bring $40,000 levels into play for the first time since 21^st January. The second major resistance level sits at $39,731.

Failure to move back through the day’s pivot would bring the first major support level at $36,116 into play. Barring an extended sell-off on the day, Bitcoin should avoid sub-$35,000. The second major support level at $35,267 should limit the downside.

Looking at the EMAs, the signal remains bearish. The 50-day EMA has pulled further back from the 100-day and 200-day EMAs. The 100-day EMA has also pulled further back from the 200-day EMA, another bearish signal. Significantly, Bitcoin continues to sit well below the 50-day EMA that has eased back to $42,800 levels.