Bitcoin Key Points
- Bitcoin is falling to 10-week lows under $72K weighed down by a fresh bout of Middle East anxiety and sales by Michael Saylor’s Strategy.
- The Crypto Fear and Greed Index has been mired in “Fear” territory (< 30) for the past two weeks.
- Bitcoin’s next significant support level doesn’t emerge until the March/April lows near $66K.
With calendars flipping into June, summer has unofficially started in the Northern Hemisphere, but the crypto market appears, if anything, to be heading into a deeper winter as we start the month.
The leader of broader crypto market, Bitcoin came under renewed pressure Monday as its “digital safe haven” narrative gave way to old-fashioned risk aversion. As we go to press, Bitcoin is falling -3% on the day, weighed down by a fresh bout of Middle East anxiety and sales by Michael Saylor’s Strategy.
The latest Iran developments added to an already cautious backdrop. Reports that Tehran had paused communication with Washington raised fears that diplomatic channels were narrowing, increasing the risk of a wider regional confrontation. Oil prices moved higher in response, feeding concerns that another energy-price shock could complicate the global inflation outlook and delay interest-rate cuts. For bitcoin, this means less appetite for speculative exposure, even as some long-term investors continue to view the asset as an alternative store of value.
Sentiment was also dented by news involving Strategy, the bitcoin-heavy company formerly known as MicroStrategy. A regulatory filing showed that Strategy sold a small amount of bitcoin to help fund preferred-stock dividend payments. While the sale was modest compared with the company’s massive holdings, it still attracted attention because Executive Chairman Michael Saylor had vowed to “never sell” Bitcoin. When even the most ardent bull in the space is forced to sell, conditions are dire indeed. The subdued sentiment is also reflected in the Crypto Fear and Greed Index, which has been mired in “Fear” territory (< 30) for the past two weeks:
Source: Alternative.me
Taken together, the headlines reinforced the idea that bitcoin remains highly dependent to global risk conditions. While supporters continue to point to institutional adoption and limited supply as long-term positives, today’s price action showed that macro stress can still dominate short-term trading.
Bitcoin Technical Analysis: BTC/USD Daily Chart
Source: Tradingview, StoneX
Turning our attention to the chart, Bitcoin is falling by more than -3% on the day, remaining within its bearish channel. Perhaps more importantly, the cryptocurrency is on track to close at its lowest level in 10 weeks, below its 100-day MA for the first time since mid-April.
For beleaguered bulls looking for signs of a turnaround, the pickings are slim. While Bitcoin is nearing the bottom of its channel, the near-term bias will remain to the downside as long as it remains below the 100-day MA around $74K. Despite the recent selloff, the 14-day RSI is not yet in oversold territory, suggesting that we haven’t seen the type of extreme selling climax that is more likely to mark a bottom yet.
To the downside, the next significant support level doesn’t emerge until the March/April lows near $66K, suggesting that the path of least resistance remains to the downside for now.
-- Written by Matt Weller, Global Head of Research
Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX
