BTC Fear & Greed Index Remains in Extreme Fear Despite BTC Gain

Key Insights:

• On Thursday, bitcoin (BTC) rose for the third time in nine sessions.
• A mixed market reaction to the US CPI report saw BTC tumble to a low of $18,161 before tracking the NASDAQ into positive territory.
• The Bitcoin Fear & Greed Index increased from 20/100 to 24/100.

On Thursday, bitcoin (BTC) rose by 1.17%. Following a 0.51% gain on Wednesday, BTC ended the day at $19,385. Notably, BTC fell short of $20,000 for the sixth consecutive session while avoiding the red for the third time in nine sessions.

After a range-bound start to the day, BTC tumbled to a mid-day low of $18,161 as investors responded to the US CPI report. BTC fell through the Major Support Levels and the September low of $18,210.

However, finding afternoon support from the NASDAQ, BTC rallied to a high of $19,515. BTC broke through the First Major Resistance Level (R1) at $19,254 and the Second Major Resistance Level (R2) at $19,347 to end the day at $19,385.

US economic indicators delivered a choppy Thursday session, with the US CPI report the focal point.

The US annual inflation rate softened from 8.3% to 8.2% in September versus an 8.1% forecast. The initial market reaction to the numbers was bearish. However, riskier assets bounced back on relief that the headline number was not higher.

In response to the CPI report, the probability of a 75-basis point rate hike in November jumped from 84.5% to 96.3%. Significantly, the chances of a 75-basis point Fed rate hike in December jumped from 28.6% to 71.5%.

Despite the rising bets of another hawkish move in December, the NASDAQ rallied by 2.23% as the earnings season got underway. Later today, JPMorgan (JPM) will be among the big names to release quarterly earnings results, with US retail sales and consumer sentiment numbers also in focus early in the US session.

This morning, the NASDAQ Mini was down 23.5 points.

The Fear & Greed Index Holds Jumps on BTC Rebound

Today, the Fear & Greed Index rose from 20/100 to 24/100, with a third BTC rise in nine sessions providing support. Despite the increase, the Index remained in the Extreme Fear zone, reflecting investor sentiment towards the Fed, the war in Ukraine, and the economic outlook.

However, avoiding sub-20/100 amidst rising bets of 75-basis point Fed rate hikes in November and December further supports a possible market bottoming out.

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.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.28% to $19,440. A mixed start to the day saw BTC fall to an early low of $19,347 before rising to a high of $19,445.

Technical Indicators

BTC needs to avoid the $19,020 pivot to target the First Major Resistance Level (R1) at $19,880. A BTC move through the Thursday high of $19,515 would signal a bullish session. However, today’s US economic indicators and FOMC member chatter will have to be crypto-friendly to support another bullish session.

In the case of an extended rally, BTC should move through the Second Major Resistance Level (R2) at $20,374 to target $21,000. The Third Major Resistance Level (R3) sits at $21,728.

A fall through the pivot would likely see BTC test the First Major Support Level (S1) at $18,526. Barring another extended sell-off, BTC should avoid sub-$18,000 and the Second Major Support Level (S2) at $17,666.

The Third Major Support Level (S3) sits at $16,312.

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 $19,447.

The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA slipped back from the 200-day EMA to deliver mixed signals.

BTC needs to move through the 100-day EMA ($19,447) to target R1 ($19,880) and support a return to $20,000. However, a fall through the 50-day EMA ($19,339 ) would give the bears a run at S1 ($18,526).