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Risk aversion BTC

As risk aversion bites, BTC and the broad market tumble

Key Insights:

  • For the first time in 5-sessions, Bitcoin (BTC) rose on Sunday.
  • Bitcoin and the crypto market reacted negatively due to Federal monetary policy.
  • The technical indicator of Bitcoin continues to flash red, with the price lying significantly below the 50-day exponential moving average.

Bitcoin (BTC) surged 0.05% on Sunday after concluding the week down 0.56 % to $39,466, after falling 0.68 % on Saturday.

Bitcoin came under heavy pressure due to the rising inflation and Federal monetary policies testing support for riskier assets.

Sunday saw a mixed session for the broader crypto market. Surging 0.95%, LUNA joined in the positive territory with Bitcoin, while the rest of the major cryptos continued their bearish session. AVAX declined by 1.84%, while SOL was down by 1.41%. However, cryptos like ADA, BNB, ETH, and XRP saw significantly modest losses -0.11%, -0.52%, -0.39% and -0.93% respectively.

Fear and Greed Index on Bitcoin Hits Reverse.
The Fear and Greed Index stood at 23/100 this morning. Despite last weeks Bitcoin’s momentary return to $42,900, the Index continued within the “Extreme Fear” and “Fear” zone since April 07

Investors’ expectations of further price deterioration are reflected by the “Fear” and “Extreme Fear.” The Index will have to rise back through 46/100 to bring April’s high of $47,433 into account for Bitcoin’s bullish run.

The NASDAQ 100 mini dropped to 102.25 points recently, while the DOW mini fell by 267 points across the global financial markets.

The NASDAQ 100 was down by 3.83% last week, and then on Friday, it tumbled further with 2.55% doing the damage.

The US majors took a huge hit due to the earning and Federal policy spilling over to the crypto market. However, from the top 10 cryptos, LUNA defied the market trend surging by 16.8%.

This week the crypto market will continue under pressure as the Federal announces its monetary policy.

The global financial market is worried as the latest news reports the measures concerning the COVID-19 lockdown in China and the ongoing war in Ukraine, which were responsible for the disruption of the supply chain.

There are several key US stats to be considered on the economic calendar. For example, the consumer confidence figures on Tuesday and Thursday. Q1 GDP numbers will be announced ahead of the inflation number on Friday.

Finally, the question needs to be answered if the market has been more hawkish due to the Federal’s introduction of interest rates to reduce inflation.

Price Action of Bitcoin.

Bitcoin fell by 0.93% to $39,101 at the time of writing. Bitcoin started the week with a bearish approach sliding down to an early morning low of $38,753.

Before finding support, Bitcoin went through the First Major Support Level at $39,026.

Technical Indicators

To reach the First Major Resistance Level at $39,922, Bitcoin will have to break through the day’s pivot around $39,482. To break out of the $39,500 range, Bitcoin would require broader market support.

Bitcoin might test the Second Major Resistance Level at $40,384 in the event of another extended rally. $41,282 is the third major resistance level.

If the pivot does not move, the First Major Support Level of $39,026 will be activated. Bitcoin should avoid falling below $38,000 unless there is a prolonged sell-off. The downside should be limited by the Second Major Support Level at $38,586.

Bitcoin is currently trading at $40,366 and is trading below the 50-day EMA. In addition, the 50-day EMA has pulled further away from the 100-day EMA this morning, putting downward pressure on the market.

If the 50-day EMA proceeds along, then it would pave the way for a run at the $42,997 high set last week.

The Reversal of a Broader Crypto Market

XPR fell by 2.97%, with ADA and ETH falling closely behind by -2.60% and -2.03%.
AVAX, BNB, SOL, and Terra also struggled, falling down -1.96%, -1.20%, -1.91% and -1.47 respectively.