BTC Fear & Greed Index Falls to Sub-60 Signaling a Bearish BTC Session

Key Insights:

• It was a bearish Sunday, with BTC falling by 1.42% to end the day at $24,284.
• Fed Fear and regulatory risk left investors to lock in profits ahead of an uncertain week.
• The Fear & Greed Index remained within the Greed zone, despite falling from 60/100 to 58/100.

On Sunday, bitcoin (BTC) fell by 1.42%. Reversing a 0.21% gain from Saturday, BTC ended the week up 11.53% to $24,284. Despite the bearish session, BTC revisited the $25,000 handle for the third time in four sessions.

After a range-bound morning, BTC rallied to a late afternoon high of $25,209. BTC broke through the First Major Resistance Level (R1) at $24,857 and the Second Major Resistance Level (R2) at $25,082 before hitting reverse.

The reversal saw BTC slide to a late low of $24,221. BTC fell through the First Major Support Level (S1) at $24,429 to wrap up the day at $24,284. The Second Major Support Level (S2) at $24,226 cushioned the downside.

Fed Fear and Regulatory Risk Resurfaced to Send BTC into the Red

Investors locked in profits on Sunday evening to leave BTC in the red for the session. While US lawmaker scrutiny of SEC moves against crypto platforms delivered mid-week support, regulatory risk lingered.

Following the collapse of FTX, investors expect a shift in the regulatory landscape that could materially affect the US crypto market. Last week, the Wall Street Journal reported that Binance needs to pay penalties following a Department of Justice and CFTC probe into the platform’s operations.

After the SEC moves against Kraken and Paxos, the increased regulatory scrutiny could come from all three, placing more pressure on the crypto market.

Fed Fear also remains a crypto market headwind. Following the latest round of US economic indicators and Fed chatter, the markets are betting on a more aggressive interest rate trajectory. The Fed could raise rates to a 5.5% peak and hold for longer to bring inflation to target.

The Day Ahead

Investors should continue monitoring the crypto news wires for events that could move the dial. Binance news will continue to draw interest, with FTX, Genesis, and Silvergate Bank updates to influence investor appetite.

However, there are no US economic indicators to guide investors today, with the US commemorating George Washington’s birthday.

The Fear & Greed Index Remains Greedy Despite BTC Pullback

Today, the BTC Fear & Greed Index fell from 60/100 to 58/100. However, the Index remained within the Greed zone, with BTC avoiding a return to sub-$24,000 for a second session delivering support.

Regulatory jitters resurfaced over the weekend, leading to a late Sunday pullback. With the US Department of Justice, the CFTC, and the SEC increasing regulatory activity in the digital asset space, it could be a tough time for the US market. The likelihood of a more aggressive Fed interest rate trajectory also weighed on the Index.

After returning to the Greed zone, the Index must avoid the Neutral zone to support a BTC breakout from $25,000 to target $30,000. However, an Index return to the Fear zone would signal a near-term bullish trend reversal.

SEC activity and US lawmaker chatter will remain the key drivers over the near term.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.56% to $24,147. A mixed start to the day saw BTC rise to an early high of $24,409 before falling to a low of $24,116.

Technical Indicators

BTC needs to move through the $24,571 pivot to target the First Major Resistance Level (R1) at $24,922 and the Sunday high of $25,209. A return to $25,000 would signal a breakout session. The crypto news wires need to be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $25,559 and resistance at $26,000. The Third Major Resistance Level (R3) sits at $26,547.

Failure to move through the pivot would leave the First Major Support Level (S1) at $23,934 in play. However, barring a crypto event-fueled crypto sell-off, BTC should avoid sub-$23,500. The Second Major Support Level (S2) at $23,583 should limit the downside.

The Third Major Support Level (S3) sits at $22,595.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($23,670). The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($23,934) and the 50-day EMA ($23,670) would support a breakout from R1 ($24,922) to target R2 ($25,559) and $26,000. However, a fall through S1 ($23,934) and the 50-day EMA ($23,670) would give the bears a run at S2 ($23,583). A fall through the 50-day EMA ($23,670) would send a bearish signal.