BTC Fear & Greed Index Holds Steady as Investors Await the Fed

Key Insights:

• On Tuesday, bitcoin (BTC) fell by 3.37% to end the day at sub-$19,000 for the first time since September 6 and just the second time since June.
• Fed fear weighed on BTC as the markets prepare for Wednesday’s policy decision and projections.
• The Bitcoin Fear & Greed Index held steady at 23/100 despite the BTC return to sub-$19,000.

On Tuesday, bitcoin (BTC) slid by 3.37%. Reversing a 0.65% gain from Monday, BTC ended the day at $18,887. BTC fell short of $20,000 for the fifth time since July 3 and wrapped up the day at sub-$19,000 for the second time since June.

A mixed start to the day saw BTC rise to an early high of $19,635 before hitting reverse. Coming up short of the First Major Resistance Level (R1) at $20,074, BTC slid to a late afternoon low of $18,754. However, avoiding the First Major Support Level (S1) at $18,636, BTC ended the day at $18,887.

BTC tracked the NASDAQ 100 throughout the US session, with Fed fear and economic woes weighing on riskier assets. Market uncertainty on whether the Fed front loads with a percentage point rate hike sent the crypto market cap back to sub-$900 billion.

This week, comments from Ford (F) added to the bearish mood. A growing number of US-listed companies are raising the red flag over the economic outlook. On Tuesday, the NASDAQ 100 fell by 0.95%. This morning, the NASDAQ 100 Mini was up 13.75 points to deliver modest support.

It will likely be another choppy session today as investors await the Fed monetary policy decision and projections. A hawkish Fed rate hike could see BTC head towards the 2022 low of $17,601.

Bitcoin Fear & Greed Index Holds Steady as Investors Await the Fed

Today, the Fear & Greed Index remained unchanged at 23/100. The Index showed a muted response to a BTC return to sub-$19,000. Investor uncertainty towards the Fed and the economic outlook left the Index in the Extreme Fear zone.

For investors considering the Index as a guide, the lack of a trend affirms the current uncertainty surrounding the Fed policy decision and economic outlook.

In recent weeks, avoiding sub-20/100 has been the key. The bears will be eying a fall to sub-20/100 to signal a BTC slide to sub-$18,000. By contrast, the bulls will look for an Index return to 40/100 to support a move toward $25,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.28% to $18,939. A mixed start to the day saw BTC fall to an early low of $18,845 before rising to a high of $18,968.

Technical Indicators

BTC needs to move through the $19,092 pivot to target the First Major Resistance Level (R1) at $19,430 and the Tuesday high of $19,635. With investors looking ahead to today’s monetary policy decision, the NASDAQ 100 will continue to influence. There are no US economic indicators to consider today.

In the case of an extended rally, BTC should test the Second Major Resistance Level (R2) at $19,973 and resistance at $20,500. The Third Major Resistance Level (R3) sits at $20,854.

Failure to move through the pivot would leave the First Major Support Level (S1) at $18,549 in play. Barring another extended sell-off, BTC should avoid sub-$18,000. The Second Major Support Level (S2) at $18,211 should limit the damage.

The Third Major Support Level (S3) sits at $17,330.

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 $19,769.

The 50-day EMA slipped back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish price signals.

A move through R1 ($19,430) would give the bulls a run at the 50-day EMA ($19,769) and R2 ($19,973). The 200-day EMA sits at $20,624. However, failure to move through the 50-day EMA would leave BTC under pressure.

Trend Analysis

Looking at the trends, BTC would need a move through the August high of $25,203 and $25,500 to target the June high of $31,956. Avoiding a fall through the September low of $18,256 would support a move back towards $25,000.

However, the trend has turned bearish following Monday’s new September low. A fall through the September low of $18,256 would bring sub-$18,000 and the June low of $17,601 into play. A Fear & Greed Index return to 30/100 should support a shift in sentiment, which may hinge on the Fed.