BTC Fear & Greed Index Falls on Genesis News and a NASDAQ Index Slide

Key Insights:

• On Wednesday, bitcoin (BTC) fell by 1.37%. Marking the eighth loss from eleven sessions, BTC ended the day at $16,654.
• News of Genesis Trading freezing redemptions and the NASDAQ Composite Index sent BTC and the broader crypto market into the red.
• The Bitcoin Fear & Greed Index fell from 23/100 to 20/100 as contagion fear resurfaced.

On Wednesday, bitcoin (BTC) fell by 1.37%. Partially reversing a 1.56% gain from Tuesday, BTC ended the day at $16,654. Notably, ended the day at sub-$17,000 for the sixth time since 2020.

A mixed start to the day saw BTC rise to an early high of $17,002. However, coming up short of the First Major Resistance Level (R1) at $17,164, BTC fell to a mid-afternoon low of $16,347. BTC fell through the First Major Support Level (S1) at $16,575 before wrapping up the day at $16,654.

US economic indicators failed to provide support, despite a 1.3% jump in retail sales. News of Genesis suspending redemptions hit the wires ahead of the retail sales numbers, sending the BTC deeper into the red.

Adding to the market angst were updates from Target Corp (TGT) and Micron Tech (MU), which left the US equity markets in negative territory. NASDAQ-listed Micron Tech (MU) announced plans to reduce memory chip supplies and make more cuts to its capital spending plans.

Later today, US jobless claims and Philly Fed Manufacturing numbers could influence. However, further signs of contagion would overshadow positive stats and a NASDAQ Index recovery of Wednesday’s losses. This morning, the NASDAQ mini was up 39.5 points.

The Fear & Greed Index Falls Deeper into the Extreme Fear Zone

Today, the Fear & Greed Index fell from 23/100 to 20/100. The news of Genesis Trading freezing redemptions weighed on investor sentiment mid-week. Contagion risk remains a significant risk to the crypto market near term, leaving investors sensitive to news of freezes.

However, the Index avoided sub-20 despite the Genesis news, suggesting investor resilience. The Binance recovery fund and interest in backing the fund likely limited the damage.

Attending a conference in Abu Dhabi, Binance CEO CZ reportedly said,

“There are players that have strong financials and we should band together; we’ve got significant interest so far.”

CZ did not provide names of institutions or exchanges or details of the recovery fund in terms of the mechanism, such as current size and qualification criteria.

However, CZ did say that more details about the fund will be available over the next two weeks.

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 up 0.10% to $16,671. A range-bound start to the day saw BTC fall to an early low of $16,650 before rising to a high of $16,700.

Technical Indicators

BTC needs to avoid the $16,668 pivot to target the First Major Resistance Level (R1) at $16,988 and the Wednesday high of $17,002. A return to $17,000 would signal a bullish session. However, the direction will hinge on FTX updates, contagion news, and US stats.

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 $17,978.

A fall through the pivot would bring the First Major Support Level (S1) at $16,333 into play. Barring another extended sell-off, BTC should avoid sub-$16,000. The Second Major Support Level (S2) at $16,013 should limit the downside. However, negative FTX-related news could send BTC to sub-$15,000.

The Third Major Support Level (S3) sits at $15,358.

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 $17,301. The 50-day EMA eased 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 ($16,988) would give the bulls a run at the 50-day EMA ($17,301) and R2 ($17,323). However, failure to move through the 50-day EMA would leave BTC under pressure and S1 ($16,333) in view.