BTC is back in the red this morning. With the Fear & Greed Index falling back to 20/100, recession fears could test crypto investor resilience.
On Monday, bitcoin (BTC) fell by 1.25%. Partially reversing a 1.90% gain from Sunday, BTC ended the day at $19,340. Notably, BTC fell short of $20,000 for the seventeenth consecutive session while also avoiding sub-$19,000 for a third session.
A mixed start to the day saw BTC rise to an early high of $19,615. However, falling short of the First Major Resistance Level (R1) at $19,833, BTC slid to an early afternoon low of $19,174. BTC fell through the First Major Support Level (S1) at $19,212 before briefly revisiting $19,433. However, a bearish end to the session left BTC in the red.
Better-than-expected Q3 GDP numbers from China failed to deliver early support. Market reaction to Xi Jinping taking his leadership into a third term, with a government stacked with loyalists, set the tone.
Private sector PMIs from the EU and the US added to the bearish mood. Significantly, the US services PMI slid from 49.3 to a two-month low of 46.6, raising the threat of a US recession. While the numbers led to expectations of the Fed taking its foot off the gas, recession fears weighed on the crypto market.
On Monday, the NASDAQ 100 rose by 0.80% while the crypto market fell by 1.12%. However, the NASDAQ 100 Mini was down 26 points, supporting a bearish start to the Tuesday session.
Later today, US consumer confidence numbers will likely provide direction. A drop in the CB Consumer Confidence index to sub-100 would impact market risk sentiment.
Today, the Fear & Greed Index fell from 22/100 to 20/100. The fall deeper into the Extreme Fear zone came in response to the disappointing economic indicators from the EU and the US. Despite the weak numbers, the probability of a 75-basis point rate hike for November and December increased.
This morning, the FedWatch Tool had the probability of November and December rate hikes at 95.5% and 54.9%, respectively. One day ago, the likelihood of a 75-basis point hike in December stood at 45.6%.
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.
At the time of writing, BTC was down 0.25% to $19,292. A mixed start to the morning saw BTC rise to an early high of $19,347 before falling to a low of $19,259.
BTC needs to move through the $19,376 pivot to target the First Major Resistance Level (R1) at $19,579 and the Monday high of $19,615. Economic data from the US would need to be crypto-friendly to support a breakout from $19,500.
In the case of an extended rally, the Second Major Resistance Level (R2) at $19,817 and $20,000 would likely come into play. The Third Major Resistance Level (R3) sits at $20,258.
Failure to move through the pivot would leave the First Major Support Level (S1) at $19,138 in play. Barring an extended sell-off, BTC should avoid sub-$19,000 and the Second Major Support Level (S2) at $18,935.
The Third Major Support Level (S3) sits at $18,494.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 100-day EMA, currently at $19,318. The 50-day EMA flattened on the 100-day EMA, while the 100-day EMA eased back from the 200-day EMA to deliver mixed signals.
BTC needs to break out from the 100-day EMA ($19,318) to give the bulls a run at the 200-day EMA ($19,501) and R1 ($19,578). However, a fall through the 50-day EMA ($19,278) would bring S1 ($19,138) into play.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.