BTC Fear & Greed Index Languishes in Extreme Fear of the Fed

Key Insights:

• On Thursday, bitcoin (BTC) rose by 0.88%. Following a 1.69% gain on Wednesday, BTC ended the day at $19,589.
• It was another choppy session, with a Court ruling from the SEC v Ripple case delivering late support.
• However, the Bitcoin Fear & Greed Index slipped from 22/100 to 21/100.

On Thursday, bitcoin (BTC) rose by 0.88%. Following a 1.69% gain on Wednesday, BTC ended the day at $19,589. Significantly, BTC failed to revisit $20,000 for the tenth time in eleven sessions while avoiding sub-$18,500.

After a range-bound morning, BTC fell to an early afternoon low of $18,859. Steering clear of the First Major Support Level (S1) at $18,668, BTC rallied to a late high of $19,652. However, coming up short of the First Major Resistance Level (R1) at $19,981, BTC slipped back to sub-$19,600.

Following Wednesday’s choppy session, the NASDAQ 100 influenced through the day. However, a Court ruling from the SEC v Ripple case in favor of Ripple delivered late support.

Since the introduction of the Lummis and Gillibrand Bill in June, the crypto market has sided in favor of the Commodity Futures Trading Commission (CFTC) to regulate the digital asset space. The latest ruling could hinder the SEC’s chances of being given the task.

The bullish BTC session came despite the NASDAQ 100 sliding by 2.84%, weighed by Fed fear. This morning, the NASDAQ 100 Mini was down 9.75 points, with investor focus shifting to US inflation figures and Fed chatter.

Bitcoin Fear & Greed Index Slips Deeper into the Extreme Fear Zone

Today, the Fear & Greed Index fell from 22/100 to 21/100. A bullish afternoon crypto session failed to prevent a modest pullback. The Index remains deep within the Extreme Fear zone, reflecting investor sentiment towards the Fed and the 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 down 1.16% to $19,362. A mixed start to the day saw BTC rise to an early high of $19,705 before falling to a low of $19,320.

Technical Indicators

BTC needs to move through the $19,367 pivot to target the First Major Resistance Level (R1) at $19,874. A BTC move through the Thursday high of $19,652 would support a bullish session.

In the case of another extended rally, BTC should test the Second Major Resistance Level (R2) at $20,160 and resistance at $20,500. The Third Major Resistance Level (R3) sits at $20,953. US inflation numbers will need to be softer to support a breakout session.

Failure to move through the pivot would leave the First Major Support Level (S1) at $19,081 in play. Barring an extended sell-off, BTC should avoid sub-$18,500. The Second Major Support Level (S2) at $18,574 will likely limit the downside.

The Third Major Support Level (S3) sits at $17,781.

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 $19,531.

The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA pulled back from the 200-day EMA, delivering mixed price signals.

A move through the 100-day ($19,531) EMAs would give the bulls a run at R1 ($19,874) and the 200-day EMA ($20,035). However, a slide through the 50-day EMA ($19,334) would give the bears a run at S1 ($19,081) and a BTC fall to sub-$19,000.