Bitcoin (BTC) Hits Reverse with a Return to Sub-$30,000

Key Insights:

• On Wednesday, bitcoin (BTC) slid by 6.27% to end a four-day winning streak and kick June off in a bearish fashion.
• Market angst over inflation and Fed monetary policy resurfaced.
• Bitcoin (BTC) technical indicators flashed red, with bitcoin sitting below the 50-day EMA.

On Wednesday, bitcoin (BTC) slid by 6.27%. Reversing a 0.21% gain from Tuesday, bitcoin ended the day at $29,790.

A mixed start saw bitcoin rise to an early morning high of $31,956 before hitting reverse.

Bitcoin came up against resistance at $32,000 before sliding to a late intraday low of $29,324.

The extended sell-off saw bitcoin fall through the day’s Major Support Levels before a partial recovery to test resistance at $30,000.

Bitcoin moved back through the Third Major Support Level at $29,456.

Market angst over inflation and Fed monetary policy sent bitcoin and the broader market into the red. Investors responded to manufacturing sector data from the US.

The Bitcoin Fear & Greed Index Hits Reverse Again

Today, the Fear & Greed Index fell from 17/100 to 13/100 in response to Wednesday’s crypto sell-off.

The Index has been in the “Extreme Fear” zone since May 5, reflecting the downside risks that plague the crypto market.

Investor jitters over inflation and Fed monetary policy continued to test appetite for riskier assets.

The market reaction to the release of US manufacturing data on Wednesday reflected investor sensitivity to Fed policy.

In May, the ISM Manufacturing PMI rose from 55.4 to 56.1, showing strength in the US economy. The numbers also support a more hawkish stance on interest rates for the Fed.

The NASDAQ 100 hit reverse in response, with bitcoin and the broader market in tow.

After de-coupling from the NASDAQ 100, bitcoin recoupled with the NASDAQ this week. On Wednesday, the NASDAQ fell by 0.72%, with the stats from the US doing the damage.

Regulatory uncertainty also remains a concern for investors following the collapse of TerraUSD (UST) and Terra LUNA.

The latest 24-hour liquidation figures reflected the bearish sentiment.

According to Coinglass, 24-hour liquidations stood at $593.19 million, compared with $229.73 million yesterday morning. However, crypto market conditions improved over the last hour, with total liquidations at $5.88 million.

For bitcoin, 24-hour liquidations stood at $352.49 million and just $1.96 million over the last hour.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.20% to $29,730.

Technical Indicators

BTC will need to move through the $30,360 pivot to target the First Major Resistance Level at $31,383.

BTC would need the broader crypto market to support a return to $31,000 levels.

An extended rally would test the Second Major Resistance Level at $32,991 and resistance at $33,500. The Third Major Resistance Level sits at $35,621.

Failure to move through the pivot would test the First Major Support Level at $28,754. Barring another extended sell-off, BTC should steer clear of sub-$28,000 levels. The Second Major Support Level sits at $27,723.

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 $30,257. The 50-day pulled back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA, BTC negative.

A move through the 50-day EMA and the 100-day EMA at $30,445 would support a run at $33,500.