Key Insights:
- On Sunday, bitcoin (BTC) fell by 2.50%. Ending a three-day winning streak, BTC ended the day at $16,278.
- FTX and Grayscale news reignited contagion fear, sending BTC to its lowest level in six sessions.
- The Bitcoin Fear & Greed Index fell from 24/100 to 21/100, reflecting the shift in investor sentiment.
On Sunday, bitcoin (BTC) fell by 2.50%. Reversing a 0.06% gain from Saturday, BTC ended the week down 0.41% to $16,278. Notably, BTC ended a three-day winning streak while avoiding sub-$16,000.
A mixed start to the day saw BTC rise to an early high of $16,742. Coming up short of the First Major Resistance Level (R1) at $16,825, BTC slid to a late low of $16,184. BTC fell through the First Major Support Level (S1) at $16,552 and the Second Major Support Level (S2) at $16,408 to end the day at sub-$16,200.
After a series of range-bound sessions, FTX and Grayscale news reignited contagion fears, sending BTC and the broader market into the red.
While Grayscale refused to publish proof-of-reserves, news of FTX owing its top 50 creditors $3.1 billion raised the prospects of more withdrawal freezes and bankruptcies in the digital asset space.
Investors need to continue monitoring the crypto news wires and regulatory chatter. Over the final hour (UTC), the NASDAQ mini provided little support. At the time of writing, the NASDAQ mini was down 20 points.
Later today, FOMC member chatter will need consideration, with hawkish commentary likely to weigh on investor sentiment.
The Fear & Greed Index Slides on Contagion Risk
Today, the Fear & Greed Index fell from 24/100 to 21/100. BTC ended a three-day winning streak as investors responded to the latest FTX news. After being in wait-and-see mode, the latest crypto news sparked fears of more crypto platforms heading toward bankruptcy.
Contagion risk is unlikely to abate, with uncertainty over the crypto regulatory landscape another headwind.
Avoiding sub-20/100 remains the key for the bulls. A fall to sub-20/100 would see BTC face the risk of sub-$10,000.
Bitcoin (BTC) Price Action
At the time of writing, BTC was down 0.39% to $16,214. A bearish start to the day saw BTC fall from an early high of $16,282 to a low of $16,120.
Technical Indicators
BTC needs to move through the $16,401 pivot to target the First Major Resistance Level (R1) at $16,619 and the Sunday high of $16,742. A return to $16,500 would signal a bullish session. However, news updates have to be market-friendly to support a breakout session.
In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $16,959 and resistance at $17,000.
The Third Major Resistance Level (R3) sits at $17,517.
Failure to move through the pivot would leave the First Major Support Level (S1) at $16,061 in play. Barring another extended sell-off, BTC should avoid sub-$15,500. The Second Major Support Level (S2) at $15,843 should limit the downside. However, negative FTX-related news could send BTC to sub-$15,000.
The Third Major Support Level (S3) sits at $15,285.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $16,861. The 50-day EMA eased back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.
A move through R1 ($16,619) would give the bulls a run at the 50-day EMA ($16,861) and R2 ($16,959). However, failure to move through the 50-day EMA would leave BTC under pressure and bring S1 ($16,061) into play.
Read More: BTC Fear & Greed Index Slides as Contagion Sends BTC to Sub-$16,500