Bitcoin (BTC) Joins the Greenback as a Go-To Asset

Key Insights:

• Bitcoin (BTC) consolidated Monday’s breakout with a 2.9% rise on Tuesday.
• Monday’s break out saw Bitcoin continue to decouple from the NASDAQ 100 and broader global equity markets.
• Tuesday price action also saw Bitcoin solidify its position as a “Go-To” asset.

It was another bullish day for Bitcoin (BTC) on Tuesday. Recovering from an early morning low of $42,894, Bitcoin rallied to an afternoon high of $44,883 before easing back. Resistance at $45,000 pegged Bitcoin back on the day.

Following Monday’s 14.51% surge, Bitcoin ended the day up by 2.87% at $44,428.

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

LUNA and SOL fell by 1.89% and 1.06%, respectively, to buck the broader market trend, with ADA ending the day flat.

BNB (+3.31%), AVAX (+2.84%), and ETH (+1.87%) found support, however, with XRP (+0.32%) also avoiding the red.

Bitcoin Fear & Greed Index Continues the Upswing

Following Tuesday’s surge to 51/100 in response to Bitcoin’s Monday breakout, the index climbed to 52/100 this morning.

For the Bitcoin bulls, the index will need to move back through to 54/100 to bring $50,000 levels back into play for Bitcoin. A fall to sub-20/100 would deliver sub-$30,000 levels.

Movement across the crypto and equity markets demonstrated a further decoupling of Bitcoin from the NASDAQ 100. On Tuesday, the NASDAQ 100 fell by 1.59%, which was modest relative to the European equity markets. The CAC40 slid by 3.94% on the day.

Across the major currency pairings, demand for the Dollar was aligned with the sharp pickup in Bitcoin interest. The U.S Dollar Spot Index climbed by 0.73%, while the EUR, the GBP, and the commodity currencies struggled.

Russia’s invasion of Ukraine and reaction to sanctions from the West have severely impacted market risk appetite. Demand for Bitcoin is cementing its place as a new go-to asset to join the ranks of the Dollar, the Japanese Yen, and gold. Gold spot rose by 1.37% on Tuesday.

For Bitcoin, much will depend on how governments and regulators respond, with a global regulatory framework in the works. Both could materially impact crypto activity as governments look to prevent Russia from evading current sanctions.

Bitcoin Price Action

At the time of writing, Bitcoin was up by 0.14% to $44,492.

Technical Indicators

Bitcoin will need to avoid the $44,072 pivot to make a run on the First Major Resistance Level at $45,238. Bitcoin would need broader market support to break through to $45,000.

In the event of another extended rally, the Second Major Resistance Level at $46,042 would come into play. The Third Major Resistance Level sits at $48,054.

A fall through the pivot would bring the First Major Support Level at $43,246 into play. Barring an extended sell-off throughout the day, Bitcoin should avoid sub-$40,000 levels. The Second Major Support Level at $42,076 should limit the downside.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bullish signal. Bitcoin continues to sit well above the 200-day EMA. The 50-day EMA has narrowed to the 200-day after the overnight bullish cross of the 50-day EMA through the 100-day EMA. A bullish cross of the 50-day EMA through the 200-day EMA would bring the Major Resistance levels and $50,000 into play.

Avoiding the 200-day EMA, currently at $40,600, would support further upside.