Bitcoin Fear & Greed Index Responds to a Bullish BTC Return to $20,000

Key Insights:

• On Tuesday, bitcoin (BTC) rallied by 3.63% to end the session holding onto the $20,000 handle for the first time since September 17.
• US economic indicators continued to drive dollar weakness as the numbers further eased bets of a hawkish Fed rate hike in November.
• The bullish BTC session sent the Bitcoin Fear & Greed Index to the border of the Fear zone, with an increase from 20/100 to 25/100.

On Tuesday, bitcoin (BTC) rallied by 3.63%. Following a 2.96% gain on Monday, BTC ended the day at $20,344. Notably, BTC held onto the $20,000 handle for the first time since September 17.

A bearish start to the session saw BTC fall to an early low of $19,502. Steering clear of the First Major Support Level (S1) at $19,172, BTC rallied to a late high of $20,543. BTC broke through the First Major Resistance Level (R1) at $19,900 and the Second Major Resistance Level (R2) at $20,168 to end the day at $20,344.

Fed fear subsided further on Tuesday, with JOLTs job openings easing bets of another 75-basis point rate hike. Following the market reaction to the ISM Manufacturing PMI and sub-components on Monday, the latest job openings suggested a shift in labor market conditions.

FOMC member chatter was also crypto-friendly, with FOMC member Mary Daly saying that the Fed has the ways and the means to bring inflation under control in the gentlest way possible.

In response to the numbers and Fed chatter, the NASDAQ 100 rallied by 3.34%. This morning, the NASDAQ 100 Mini was down 49.75 points. Later today, the market focus will shift to the US ADP nonfarm employment change and ISM Non-Manufacturing PMI numbers.

Bitcoin Fear & Greed Index Bounces Back on BTC Return to $20,000

Today, the Fear & Greed Index rose from 20/100 to 25/100. A bullish BTC session drove the Index to the border of the Extreme Fear-Fear zone. Easing bets of a hawkish Fed rate hike, stemming from softer labor market conditions, delivered the upside.

Notably, the Index continued to avoid sub-20/100, which has allowed BTC to avoid sub-$18,000.

For the bulls, the Index will need to continue avoiding sub-20/100 to support a shift in sentiment. However, a fall to sub-20/100 would signal a BTC slide to sub-$18,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.71% to $20,199. A mixed start to the day saw BTC rise to an early high of $20,363 before falling to a low of $20,158.

Technical Indicators

BTC needs to avoid the $20,130 pivot to target the First Major Resistance Level (R1) at $20,757 and resistance at $21,000. A BTC move through the Tuesday high of $20,543 would signal a bullish session.

In the case of another extended rally, BTC should test the Second Major Resistance Level (R2) at $21,171 and resistance at $21,500. The Third Major Resistance Level (R3) sits at $22,212.

A fall through the pivot would bring the First Major Support Level (S1) at $19,716 into play. Barring an extended sell-off, BTC should avoid sub-$19,500 and the Second Major Support Level (S2) at $19,089. Positive ISM Non-Manufacturing PMI numbers from the US would pressure BTC later today.

The Third Major Support Level (S3) sits at $18,048.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. This morning, bitcoin sat above the 200-day EMA, currently at $19,906.

The 50-day EMA converged on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish price signals.

A bullish cross of the 50-day EMA through the 100-day EMA would support a breakout from R1 ($20,757) to target R2 ($21,171). However, a fall through the 200-day EMA ($19,906) would give the bears a run at S1 ($19,716), the 100-day EMA ($19,542), and the 50-day EMA ($19,518).