The NASDAQ 100 Supports a Bitcoin (BTC) Bounce Back on Monday
It was a bullish end to a particularly bearish month for Bitcoin (BTC) and the broader crypto market. Bitcoin rose by 1.55% to end the day at $38,495. It had been a bearish start, however, with Bitcoin sliding back to sub-$37,000 levels before finding support.
A NASDAQ 100 Breakout Supports a Bitcoin Rebound
Going into the U.S morning session, the NASDAQ 100 shifted market appetite for riskier assets. Bitcoin rallied from a day low $36,674 to strike a late intraday high $38,785 before easing back.
Following a 3-day winning streak, Bitcoin and the broader market had been under pressure on Sunday and early Monday. Negative sentiment towards FED monetary policy and regulatory scrutiny continued to weigh. From the U.S, however, oversold conditions drew in dip buyers across the U.S equity markets and the crypto market.
Once more, IMF concerns over the interconnectedness between cryptos and the U.S equity markets were justified.
While it was a bullish end to the month, January 2022 proved to be Bitcoin’s worse start to the year since the January 2018 meltdown. Bitcoin ended January 2022 down by 16.7%. In January 2018, Bitcoin had fallen by 25.4%. The monthly declines were certainly not the worst, however, with 2021 a particularly choppy year. A 35.3% slump in May 2021 was the largest monthly sell-off since a 36.6% tumble in November 2018. Coincidentally, Bitcoin had fallen by 32.9% in March 2018. If similar chart patterns are to be seen, the more hawkish Bitcoin price predictions could prove accurate. Much, however, will depend on regulatory oversight and of course, the FED.
The Bitcoin Fear & Greed Index
Monday’s recovery led to a rise in the Bitcoin Fear & Greed Index to 26/100. The Index recovered from a Monday pullback to 20/100 after having revisited a January high 29/100 on Sunday.
Holding well above a 23rd January 11/100, a move out of the red zone to 30/100 will be a key move. Currently sitting in the red-zone, the index had last been out of the red zone on 28th December. The Index had stood at 41/00, which was on the cusp of the neutral yellow zone.
Key Drivers for the Week Ahead
In the coming days, regulatory chatter will remain a key driver for Bitcoin and the broader market. Following the NASDAQ 100 rally on Monday, we can also expect Bitcoin to take its cues from the U.S equity markets.
A Bitcoin move back through to $40,000, however, could ease some of the interconnectedness seen between the two markets.
Bitcoin Price Action
At the time of writing, Bitcoin was up by 0.10% to $38,535. Avoiding the day’s $37,975 pivot would support a run at the first major resistance level at $39,290.
An extended crypto rally, however, would bring $40,000 levels into play for the first time since 21st January. The second major resistance level sits at $40,084. From $40,000, the next target would be $45,000 levels that would bring January’s high $47,979 into play.
A fall through the day’s pivot would bring the first major support level at $37,181 into play. Barring an extended sell-off on the day, Bitcoin should continue to avoid sub-$36,500. The second major support level sits at $35,866.
Looking at the moving averages, the signal remains bearish. The 50-day MA has pulled back from the 100-day and 200-day MAs, with the 100-day MA narrowing on the 200-day MA. Bitcoin also continues to sit below the 50-day MA. A move through the 50-day MA would bring January’s high into play.
This article was originally posted on FX Empire