Bitcoin (BTC) and the broader market were back in the deep red on Saturday. A 4th consecutive day in the red saw Bitcoin visit sub-$35,000 levels for the first time since 25th July.
On the day, Bitcoin fell by 3.82% to end the day at $35,076. Things were no better elsewhere. Ethereum (ETH) followed Friday’s 14.4% slump with a 6.12% loss, with Crypto.com Coin (CRO) tumbling by 16.87%. Crypto.com Coin had fallen by 14.6% on Friday. Cardano (ADA) fared marginally better, falling by just 4.46% on Saturday.
The crypto market cap fell by a further $85bn on Saturday, after having given up $200bn on Friday. At the time of writing, the total market cap stood at $1,611bn. In November, the total market cap had risen to an ATH $3,009bn before stumbling to a current month low $1,514bn.
The Bitcoin Fear & Greed Index
As at 22nd January, the Bitcoin Fear & Greed Index stood at 13/100. While continuing to hold above 8th January’s low of 10/100, the Index has retreated from a current month high 24/100.
Having failed to move back through to 30/100 levels and into the orange, the index has continued to reflect the market’s bearish sentiment. Significantly, the Index has been on a downward trend from a 20th January 24/100. The Index had risen to 84/100 on 9th November before hitting reverse.
With the Bitcoin bears in full control at present, we continue to hold the view that an Index move back through to 30/100 levels would be needed to signal the beginnings of a Bitcoin recovery.
Key Market Drivers
Market sentiment towards FED monetary policy and regulatory chatter and activity remain the key drivers.
While the U.S markets are closed on the weekend, there has been no positive chatter to shift market sentiment. With the FED in action this coming Wednesday, dip buyers could sit on the sidelines. While the markets have begun to price in 4 rate hikes for the year, nothing is set in stone. Wednesday’s rate statement and press conference will give some clarity of what lies ahead for the year.
Away from FED monetary policy, central bank chatter and the threat of more action also remains ever present. Following SEC Chair Gensler comments last week on increased crypto market scrutiny, regulatory activity is likely to pick up in the coming months.
The big news going into the weekend, however, was of Russia’s central bank proposing to ban cryptos and crypto mining. With market reaction to the news negative, the markets will need to wait until Monday at the earliest for any updates on the proposed ban.
All of this points to another choppy day ahead.
Bitcoin Price Action
At the time of writing, Bitcoin was up by 0.90% to $35,392. Bitcoin would need to avoid a fall back through today’s $35,339 pivot to support a run at Saturday’s high $36,812. A shift in sentiment would be needed, however, for Bitcoin to breakout from the day’s first major resistance level at $36,549.
A fall back through the day’s pivot would bring sub-$34,000 and the first major support level at $33,867 into play. In the event of an extended sell-off, support at $30,000 could come into play, however. For Bitcoin and the broader market, the lack of regulatory chatter could provide some respite early in the day. There’s unlikely to a shift from the current bearish sentiment, however…
This article was originally posted on FX Empire