- Bitcoin price sits at an important support level on the daily chart.
- Bitcoin’s fear and greed index has dropped to the neutral point of 53.
- Focus now shifts to the upcoming Federal Reserve decision.
Bitcoin price came under intense pressure recently as concerns about the crypto industry continued. According to Coinbase, Bitcoin price was trading at the important support level at $25,850 on Monday even as American stocks continued their bull run.
Bitcoin fear and greed index is neutral
Investors are usually driven by fear and greed. In good times, like we saw in 2021, they tend to be bullish on most assets. On the other hand, when things change, they usually rush for the exit in a bid to save their investments.
The fear and greed indicator is one of the most useful gauges in the market. The most popular gauge was started by CNN Money to guide investors about the market sentiment. It looks at several gauges like put and call options, volatility, and safe haven demand among others.
With American stocks surging, the fear and greed index has moved to the extreme greed area. It now stands at 78, higher than last week’s high of 73. This is a signal that people are shifting their cash to stocks.
On the other hand, Bitcoin’s fear and greed index is under pressure, thanks to the ongoing regulatory scrutiny in the United States. As I wrote here last week, the SEC filed far-reaching lawsuits against Binance and Coinbase, two of the biggest companies in the industry.
Therefore, Bitcoin’s fear and greed index has dropped from 53 on Monday last week to the current 47. This is a signal that sentiment in the crypto industry is a bit muted as investors assess what to expect next.
What is clear is that these lawsuits will take a long time to complete. It is also clear that the end result is that there will be regulatory clarity in the coming years.
US inflation and Fed decision
The next key catalyst for the Bitcoin price is the upcoming US inflation data that will come out on Tuesday. These numbers are expected to show that the American inflation continued dropping in May this year.
If analysts are accurate, we could see the Federal Reserve pause its interest rate hikes for now. A pause will help the bank to assess the impact o the last interest rate decisions by the Fed. It will also help to support the economy.
A pause should be a good thing for risky assets like Bitcoin, Ethereum, and technology companies. Therefore, barring any major regulatory situation, a Bitcoin price recovery cannot be ruled out.
Bitcoin price prediction
Turning to the daily chart, Bitcoin price has been in a slow bearish trend lately. Along the way, the coin has dropped below the 50-day and 100-day exponential moving averages (EMA), which is a bearish sign. The cion has also moved below the 23.6% retracement level while the Relative Strength Index (RSI) has continued falling.
Therefore, Bitcoin price sell-off will be confirmed if the coin moves below the support at $25,320. If this happens, the next level to watch will be at $24,000.
