Bitcoin Fear & Greed Index Holds Steady Despite a Bearish BTC Session

Key Insights:

• On Tuesday, bitcoin (BTC) visited $20,000 for the first time in nine sessions before ending the day in the red.
• Market reaction to US consumer confidence figures sent the S&P500 and the Dow into the red, with risk aversion weighing on BTC.
• However, the Bitcoin Fear & Greed Index held steady at 20/100.

On Tuesday, bitcoin (BTC) fell by 0.72%. Partially reversing a 2.22% gain from Monday, BTC ended the day at $19,097. Significantly, BTC visited $20,000 for the first time in nine sessions and ended the day at $19,000 for the second time in four sessions.

A bullish morning saw BTC strike a mid-day high of $20,385. BTC broke through the First Major Resistance Level (R1) at $19,481 and the Second Major Resistance Level (R2) at $19,726. Coming up against the Third Major Resistance Level (R3) at $20,365, BTC tumbled to a late low of $18,838.

However, finding support at the First Major Support Level (S1) at $18,842, BTC ended the day at $19,097.

While it was a quiet session on the crypto news wires, market sentiment toward global financial market conditions delivered morning support. A slump in the GBP/USD and other FX pairings with the dollar supported demand for alternative asset classes. Cryptos drew plenty of interest with equities in bearish territory and the bond markets also suffering.

However, US economic indicators weighed on investor appetite through the afternoon session.

US economic indicators likely contributed to the afternoon sell-off. In September, the CB Consumer Confidence Index increased from 103.6 to 108.0. Confidence improved despite the current inflation environment, the Fed’s policy goals, mortgage rates, and the economic outlook.

The consumer confidence figures support the Fed’s policy goals, which likely contributed to the risk-off session. Jobs and wages were the driving force behind the pickup in consumer confidence.

On Tuesday, the S&P500 and the Dow fell by 0.21% and 0.43%, respectively, while the NASDAQ 100 rose by 0.25%. This morning, the NASDAQ 100 Mini was down 69.25 points.

Bitcoin Fear & Greed Index Continues to Avoid Sub-20/100

Today, the Fear & Greed Index held steady at 20/100. The hold came despite BTC sliding back to sub-$19,000 in a choppy session.

Investor angst over the Fed and the economic outlook resurfaced and likely offset a pickup in optimism seen through the morning session. However, the Index continued to avoid sub-20, reflecting investor resilience.

In recent weeks, avoiding sub-20/100 has been the key. The bears will be eying a fall to sub-20/100 to signal a BTC slide to sub-$18,000. By contrast, the bulls will look for an Index return to 40/100 to support a move toward $25,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.54% to $18,993. A mixed start to the day saw BTC rise to an early high of $19,245 before falling to a low of $18,958.

Technical Indicators

BTC needs to move through the $19,440 pivot to target the First Major Resistance Level (R1) at $20,042. A BTC move through $19,500 would support a bullish session.

In the case of another extended rally, BTC should test the Second Major Resistance Level (R2) at $20,987 and resistance at $21,000. The Third Major Resistance Level (R3) sits at $22,534.

Failure to move through the pivot would leave the First Major Support Level (S1) at $18,495 in play. Barring an extended sell-off, BTC should avoid sub-$18,000 and the Second Major Support Level (S2) at $17,893. Fed Chair Powell could test investor appetite later today.

The Third Major Support Level (S3) sits at $16,346.

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 $19,322.

The 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish price signals.

A move through the 50-day and 100-day ($19,582) EMAs would give the bulls a run at R1 ($20,042) and the 200-day EMA ($20,124). However, Tuesday’s slide through the 50-day EMA suggests a bearish session ahead.