BTC Fear & Greed Index Reenters the Extreme Fear Zone on BTC Slide

Key Insights:

• On Wednesday, bitcoin (BTC) slid by 1.45%. Reversing a 0.70% gain from Tuesday, BTC ended the day at sub-$17,000 for the fourth time in eight sessions.
• Economic data from China, Vladimir Putin, and the NASDAQ Composite Index weighed on BTC and the broader market.
• Risk aversion sent the Fear & Greed Index back into the Extreme Fear zone, falling from 29/100 to 25/100.

On Wednesday, bitcoin (BTC) slid by 1.45%. Reversing a 0.70% gain from Tuesday, BTC ended the day at $16,846. The bearish session saw BTC end the day at sub-$17,000 for the fourth time in eight sessions.

A mixed morning saw BTC rise to an early morning high of $17,156 before hitting reverse. Coming up short of the First Major Resistance Level (R1) at $17,166, BTC slid to a late morning low of $16,701. BTC fell through the First Major Support Level (S1) at $16,965 and the Second Major Support Level (S2) at $16,836.

However, finding afternoon support, BTC broke back through S2 to end the day at $16,846.

Economic Recession Fears and Vladimir Putin Weighed

Early in the Wednesday session, trade data from China stoked fears of a global economic recession. Imports and exports tumbled, with further reopening measures failing to ease the bearish mood.

Vladimir Putin also weighed on riskier assets, talking about rising nuclear risks. However, Putin also said Russia would not use nuclear weapons first, easing fears of a nuclear strike on Ukraine.

Despite the latest US Jobs Report and the ISM Non-Manufacturing PMI numbers, US bank executives raised the prospects of a US economic recession, leaving the NASDAQ Composite in negative territory. On Wednesday, the NASDAQ Index fell by 0.51% to further pressure the crypto market.

Today, the US economic calendar is on the light side, with US jobless claims in focus. Barring a fall to sub-200k or a jump to 300k, the numbers should have a muted impact on BTC and the broader crypto market. This morning, the NASDAQ mini was down 53.25 points to test crypto investor sentiment.

The Fear & Greed Index Slides into the Extreme Fear Zone on a Bearish BTC

Today, the BTC Fear & Greed Index slid from 29/100 to 25/100, reversing the move from Wednesday. Significantly, the Index fell back into the Extreme Fear zone. Risk aversion stemming from fears of a global economic recession and Vladimir Putin weighed on investor sentiment.

Talk of a US recession added to the bearish mood, which led to the Index recoupling with the NASDAQ Composite Index. While recent US economic indicators have been positive, there has been a pickup in chatter, with US bank executives warning of a US economic recession.

Investors also face increased uncertainty toward Fed monetary policy.

Near-term, avoiding sub-20/100 remains the key near-term. The bulls will need to target the pre-FTX collapse November 6 high of 40/100 to support a BTC run at $20,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was flat at $16,846. A range-bound start to the day saw BTC rise to an early high of $16,894 before easing back.

Technical Indicators

BTC needs to move through the $16,901 pivot to target the First Major Resistance Level (R1) at $17,101 and the Wednesday high of $17,156. A return to $17,000 would signal a bullish session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $17,356. The Third Major Resistance Level (R3) sits at $17,811.

Failure to move through the pivot would leave the First Major Support Level (S1) at $16,646 in play. Barring an extended sell-off, BTC should avoid sub-$16,000. The Second Major Support Level (S2) at $16,446 should limit the downside. The Third Major Support Level (S3) sits at $15,991.

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 $16,907. The 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A move through the 50-day ($16,907) and the 100-day ($16,918) would support a run at R1 ($17,101) and the Wednesday high of $17,156. However, failure to move through the 50-day EMA ($16,907) would leave S1 ($16,646) and sub-$16,500 in view.