FED Monetary Policy and Geopolitics Sink Bitcoin (BTC)

Bitcoin (BTC) continued to see red on Friday, with a return to $50,000 levels now delayed near-term. Following a 2.01% fall on Thursday, Bitcoin slid by 2.60% to end the day at $42,399. Friday’s loss was just the 3^rd in 9-sessions.

The broader crypto market also struggled. Crypto top 10 new comer Avalanche (AVAX) slid by 10.24% to lead the way down. Ripple (XRP) and Solana (SOL) weren’t far behind, with losses of 8.13% and 9.09% respectively.

Another NASDAQ 100 Sell-Off and Geopolitics Hit the Crypto Market

Following U.S inflation figures on Thursday, risk aversion spread across the global financial markets on Friday. The NASDAQ 100 tumbled by 2.78%, with the Dow and the S&P500 also in the red on the day.

Market bets on a more aggressive FED rate path trajectory than had been previously priced in weighed on riskier assets. With market jitters over FED monetary policy weighing, geopolitics also impacted market risk sentiment at the end of the week. Fears of Russia invading the Ukraine added to the bearish sentiment on the day.

For Bitcoin, support at $42,000 was key with a fall to sub-$42,000 likely to have brought sub-$40,000 levels into play on the day.

Bitcoin Fear & Greed Index Continues Upswing

After having avoided a pullback in response to Thursday’s U.S inflation figures, the Bitcoin Fear & Greed Index fell back into the Fear zone overnight. This morning, the index stood at 44/100, down from 50/100 on Friday.

Near-term, the trend will be key. The Index will need to move back through Wednesday’s 54/100 to bring $50,000 levels back into play.

For the day ahead, news updates from Eastern Europe will need monitoring, with any talk of a Russian invasion market negative.

Bitcoin Price Action

At the time of writing, Bitcoin was down by 0.38% to $42,339. A move through the day’s $42,787 pivot would support a run at the first major resistance level at $43,563. Bitcoin would need plenty of support to break back through to $43,000 levels, however. In the event of an extended rally, Bitcoin could test resistance at $45,000 before any pullback. We can expect plenty of resistance at Friday’s high $43,951, however. The second major resistance level sits at $44,727.

Failure to move through the pivot would bring the first major support level at $41,623 into play. In the event of an extended sell-off, sub-$40,000 levels would likely come into play. The second major support level sits at $40,847.

Looking at the EMAs and 4-hourly candlesticks (below), the signal has become less bullish. The 50-day EMA narrowed on the 200-day EMA, with the 100-day EMA starting to flatten on the 200-day EMA. Friday’s pullback saw Bitcoin fall through the 50-day EMA. A fall through the 200-day EMA at $41,500 levels would bring sub-$40,000 into play.