FED Monetary Policy and Geopolitics Sink Bitcoin

A return to $50,000 levels is now delayed in the near-term. After a Thursday 2.01% drop, Bitcoin fell by 2.60% to close the day at $42,399. Friday's loss was only the 3 rd of 9-sessions.

The wider crypto market was also affected. Avalanche ( AVAX), a crypto top 10 newcomer, fell by 10.24% to lead this decline. With losses of 9.09% and 8.13%, Ripple ( XRP respectively) were not far behind.

Geopolitics and another NASDAQ 100 sell-off hit the Crypto Market

Risk aversion spread to the global financial markets Friday, following Thursday's U.S. inflation figures. The NASDAQ 100 fell by 2.78%. Also, the Dow and S&P500 were also in red.

Market bets on an aggressive FED rate trajectory path were more expensive than previously anticipated. This weighed on assets that are more risky. Market jitters about FED monetary policy were weighing on market sentiment. The bearish mood was exacerbated by fears of Russia invading Ukraine.

Bitcoin support at $42,000 was crucial with a fall below $42,000 likely to have brought in sub-$40,000 levels on the day.

Bitcoin Fear & Greed Index continues to rise

The Bitcoin Fear & Greed Index slipped back into the Fear zone overnight, despite avoiding a pullback to respond to U.S. inflation figures on Thursday. The index was at 44/100 this morning, down from 50/100 Friday.

The trend will be important in the near-term. To bring back $50,000, the Index must move through Wednesday's 54/100.

The day ahead will be filled with news updates from Eastern Europe. Any talk of Russia invading the market will be negative.

Bitcoin Price Action

Bitcoin was at $42,339. At the time this article was written, it had fallen by 0.38%. If Bitcoin moves through the day's pivot at $42,787, it would be possible to run at the $43,563 resistance level. To break through the $43,000 level, Bitcoin would require plenty of support. Bitcoin could face resistance at $45,000 if it experiences an extended rally. This would be before any pullback. However, we can expect lots of resistance at Friday's high of $43,951. The $44,727 level is the second major resistance.

Failure to clear the pivot will bring $41,623 as the first major support level into play. If there is an extended sell-off then sub-$40,000 levels could be in play. The $40,847 level is the second major support level.
The signal is less bullish when you look at the EMAs as well as the 4-hourly candlesticks (below). The 200-day EMA saw the 50-day EMA shrink, while the 100-day EMA began to flatten against the 200-day EMA. Bitcoin fell through the 50-day EMA on Friday due to a pullback. Sub-$40,000 would be possible if Bitcoin fell through the 200-day EMA at $41,500.