Bitcoin (BTC) Visits sub-$22,000 to Bring Sub-$20,000 into View

Key Insights:

• On Monday, bitcoin (BTC) followed last week’s 11% loss with a 15.5% tumble to end the day at $22,472.
• News of DeFi lender Celsius suspending withdrawals, swaps, and transfers added to the selling pressure.
• Technical indicators are bearish, with bitcoin sitting well below the 50-day EMA.

On Monday, bitcoin (BTC) tumbled by 15.5%. Following a 6.35% slide from the previous day, bitcoin ended the day at $22,472.

Bearish throughout the day, bitcoin slid to a final hour low of $21,976.

The extended sell-off saw bitcoin fall through the day’s Major Support Levels to test support at $22,000 before a partial recovery.

Going into the Monday session, market angst over Fed monetary policy continued to weigh. The NASDAQ 100 reflected investor sentiment towards inflation and Fed monetary policy at the start of the week.

News of DeFi lender Celsius suspending withdrawals, swaps, and transfers added to the selling pressure.

The Bitcoin Fear & Greed Index Falls to Match the May Low of 8/100

Today, the Fear & Greed Index fell from 11/100 to 8/100. A seventh day in the red and a bitcoin visit to sub-$22,000 levels sent the Index back to sub-10/100 for the first time this month.

The Index matched a May and current-year low and the lowest level since March 2020, when the Index also stood at 8/100.

Today’s slide to sub-10/100 and deeper into the “Extreme Fear” zone reflected investor sentiment more closely. The Index last visited the “Fear” zone on May 5.

The crypto market and the NASDAQ 100 saw the correlation strengthen, with the NASDAQ ending Monday down by 4.68%.

While the correlation with the NASDAQ strengthened, the inverse correlation with WTI crude oil also strengthened at the start of the week. On Friday, concerns over demand from China had weighed on WTI, weakening the inverse correlation, albeit temporarily.

At the time of writing, the NASDAQ 100 Mini was up 41.5 points, pointing to a modest rise at the US market open.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.93% to $22,263.

A mixed start to the day saw BTC rise to an early morning high of $22,770 before falling to a low of $22,263.

Technical Indicators

A BTC move through the $23,774 pivot would bring the First Major Resistance Level at $25,573 into play.

Sentiment across the global financial markets will need to improve to support a return to $25,000.

An extended rally would test resistance at $26,500. The Second Major Resistance Level sits at $28,666.

Failure to move through the pivot would bring the First Major Support Level at $20,679 in play. In the event of another extended sell-off, bitcoin could test the Second Major Support Level at $18,880 before any recovery.

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 $27,901. The 50-day EMA slid back from the 100-day EMA. The 100-day EMA fell back from the 100-day EMA, bitcoin price negative.

A return to $25,000 would give the bulls a run at the 50-day EMA.