Key Insights:

• On Thursday, bitcoin (BTC) slipped by 0.93% to $19,908. It was a fifth consecutive day in the red.

• The appetite for riskier assets took a big hit in response to US economic indicators leading BTC to sub-$19,000 before a late rally.

• Technical indicators are bearish, with bitcoin below the 50-day EMA.

On Thursday, bitcoin (BTC) fell by 0.93%. Following a 0.78% decline on Wednesday, bitcoin ended the day at $19,908.

A bearish session saw BTC slide from an early high of $20,139 to a low of $18,623.

BTC fell through the First Major Support Level at $19,826 and the Second Major Support Level at $19,555.

A final hour rebound, however, saw BTC break back through the Major Support Levels to revisit $20,000 before easing back.

Risk aversion spilled over from the US equity markets as investors responded to US inflation and personal spending numbers.

In May, the Core PCE Price Index, the Fed’s preferred inflation measure, was up 4.7% year on year, down slightly from 4.9% in April.

Personal spending increased by just 0.2% in the month, after having risen by 0.6% in April. With consumer confidence taking a hit in June, spending could materially decline, which would elevate fears of recession.

On Thursday. the correlation between bitcoin and the NASDAQ strengthened, with the bitcoin recovery coming after the US market close.

The NASDAQ 100 fell by 1.33% to end the month of June down 8.7%, compared with a BTC monthly loss of 37.4%.

At the turn of the day, the NASDAQ 100 Mini was down 2.5 points.

Economic data from the US is on the lighter side today, which should limit any market shocks. It remains to be seen whether the global financial markets can shake off the bearish sentiment, however, with no catalysts to divert attention away from Fed monetary policy.

Bitcoin Fear & Greed Index Continues to Send Bearish Signals

This morning, the Fear & Greed Index held steady at 11/100. After a modest decline from 13/100 on Wednesday, a late bitcoin rally likely prevented a fall to sub-10/100 levels.

The current trend and recent range-bound moves within the “Extreme Fear” zone continue to send bearish signals.

A move beyond 14/100 and an upward trend towards 25/100 would signal a shift in investor sentiment.

The Index last visited the “Fear Zone” on May 5, when BTC stood at $36,630.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 2.44% to $20,394.

A bullish start to the day saw BTC rise to an early high of $20,818 before easing back.

BTC briefly broke through the First Major Resistance Level at $20,493.

Technical Indicators

BTC will need to avoid the $19,559 pivot to retarget the First Major Resistance Level at $20,493 and the morning high of $20,818.

BTC would need plenty of support to break back through to $20,500.

An extended rally would test the Second Major Resistance Level at $21,074 and resistance at $21,500. The Third Major Resistance Level sits at $22,589.

A fall through the pivot would bring the First Major Support Level at $18,974 into play.

Barring another extended sell-off, BTC should avoid sub-$18,500 and the Second Major Support Level at $18,043.

The Third Major Support Level sits at $16,525.

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 $20,519.

The 50-day EMA flattened on the 100-day EMA. The 100-day EMA eased back from the 100-day EMA, bitcoin price negative.

A move back through the 50-day EMA would bring $21,500 and the 100-day EMA, currently at $21,600, into play.

However, the fall through the 50-day EMA does bring the Major Support Levels into play.

This article was originally posted on FX Empire

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