BTC Fear & Greed Index Avoids Sub-20 Despite FTX Hack and BTC Loss

Key Insights:

• On Saturday, bitcoin (BTC) fell by 1.37%. Marking the sixth loss from seven sessions, BTC ended the day at $16,814.
• As investors assessed the fallout from the FTX collapse, news of an FTX hack added to the bearish mood, leaving BTC on the back foot.
• The Bitcoin Fear & Greed Index rose from 21/100 to 22/100, suggesting investor resilience.

On Saturday, bitcoin (BTC) fell by 1.37%. Following a 3.06% loss from Friday, BTC ended the day at $16,814. Notably, BTC logged the sixth loss from seven sessions and ended the day at sub-$17,000 for only the second time since 2020.

A mixed start to the day saw BTC rise to an early high of $17,106. Coming up short of the First Major Resistance Level (R1) at $17,694, BTC slid to a mid-morning low of $16,635. However, steering clear of the First Major Support Level (S1) at $16,378, BTC revisited $17,000 before a late session pullback.

News of an FTX hack left BTC and the broader market in negative territory on Saturday. The latest FTX misstep came as investors fret over contagion risk. Following the news of BlockFi freezing withdrawals, more platforms are likely to feel the effects of the FTX collapse.

A lack of updates on a bailout plan also weighed. In an interview with Bloomberg TV, Justin Sun discussed the need to move slowly and to complete full due diligence before making any proposals.

Today, FTX-linked updates will remain the key driver. We expect further contagion signs to put BTC under more pressure.

The Fear & Greed Index Defies Gravity with a Rise to 22/100

Today, the Fear & Greed Index increased from 21/100 to 22/100. The increase came despite BTC seeing red for the sixth day from seven. However, the Index remains deep within the Extreme Fear zone, reflecting sentiment toward the FTX collapse.

While continuing to avoid sub-20, the Index tumbled to sub-10 in May following the collapse of Terra. Investor resilience may crumble should contagion spread rapidly.

Today, the FTX story remains the key driver. While looking out for contagion signs, investors will also hope for an FTX bailout plan.

The Index would need to avoid sub-20/100 to support a return to 40 and a move into the neutral zone. However, a fall to sub-20/100 would see BTC face the risk of sub-$10,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.07% to $16,808.

Technical Indicators

BTC needs to move through the $16,852 pivot to target the First Major Resistance Level (R1) at $17,067 and the Saturday high of $17,106. A return to $17,000 would signal a bullish session. However, the direction will hinge on updates on FTX and contagion news.

In the case of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $17,323 and resistance at $17,500.

The Third Major Resistance Level (R3) sits at $17,794.

Failure to move through the pivot would leave the First Major Support Level (S1) at $16,597 in play. Barring another extended sell-off, BTC should avoid sub-$16,000. The Second Major Support Level (S2) at $16,381 should limit the downside. However, negative FTX-related news could send BTC to sub-$15,000.

The Third Major Support Level (S3) sits at $15,910.

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 $18,289. The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A BTC move through R1 ($17,068) would give the bulls a run at the 50-day EMA ($18,289). However, BTC would need news of an agreed bailout plan to break down resistance at R2 ($17,323) and R3 ($17,794). Failure to move through the 50-day EMA would leave BTC under pressure and S1 ($16,597) in view.