BTC Fear & Greed Index Sends Bearish Signal Ahead of the US Open

Key Insights:

• It was a bullish Monday, with BTC rising by 0.28% to end the day at $16,690.
• Chatter from the World Economic Forum delivered support, while trading volumes remained lighter with the US markets closed for the holidays.
• The Fear & Greed Index fell from 27/100 to 26/100, signaling a mixed session ahead.

On Monday, bitcoin (BTC) rose by 0.28%. Following a 0.48% gain on Sunday, BTC ended the day at $16,690. Notably, BTC avoided sub-$16,500 for the third consecutive session while continuing to come up short of $17,000.

A bearish start to the day saw BTC fall to an early morning low of $16,584. Steering clear of the First Major Support Level (S1) at $16,559, BTC rose to a late high of $16,803. BTC broke through the First Major Resistance Level (R1) at $16,686 and briefly through the Second Major Resistance Level (R2) at $16,728 before easing back to end the day at $16,690.

$17,000 Remained Elusive in a Choppy Start to the Week

On Monday, the US markets were closed for the holidays, leaving trading volumes lower. With no NASDAQ Index to guide investors, the crypto news wires provided support in the afternoon session.

Crypto-related commentary from the World Economic Forum (WEF) gave investors another perspective on the crypto market collapse of 2022.

Notably, the WEF said,

“Cryptography and blockchains will continue to be integral parts of the modern economic toolkit.”

The WEF also compared cryptos with the dot-com bubble, saying,

“Just as it took the dot-com bubble bursting in the early 2000s to hand over the future of the internet to more durable companies, business models, and use cases, perhaps 2022 marks the handover of crypto technology and blockchain infrastructure to steadier hands.”

Today, manufacturing data from China and the US and any FOMC member chatter will influence. With the US markets reopening today, the crypto news wires and the NASDAQ Index will likely guide investors in the afternoon session. However, hawkish FOMC member chatter could test buyer appetite. The NASDAQ mini was down 15 points this morning.

The Fear & Greed Index Slips Despite Bullish BTC Session

Today, the BTC Fear & Greed Index fell from 27/100 to 26/100.

Notably, the Index avoided a return to the Extreme Fear zone. However, a bullish BTC session failed to prevent a fall, suggesting investor uncertainty towards the near-term outlook. BTC continues to sit short of $17,000, with the crypto market cap failing to return to $800 billion.

Crypto headwinds have pegged BTC and the broader market back, preventing the Index from returning to the Neutral zone.

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 up 0.20% to $16,724. A range-bound start to the day saw BTC fall to an early low of $16,671 before rising to a high of $16,724.

Technical Indicators

BTC needs to avoid a fall through the $16,692 pivot to target the First Major Resistance Level (R1) at $16,801 and the Monday high of $16,803. A return to $16,800 would signal a bullish session. However, the crypto news wires need to be crypto-friendly to support a breakout session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $16,911 and resistance at $17,000. The Third Major Resistance Level (R3) sits at $17,130.

A fall through the pivot would bring the First Major Support Level (S1) at $16,582 into play. Barring a crypto risk-off-fueled sell-off, BTC should avoid sub-$16,500 and the Second Major Support Level (S2) at $16,474. The Third Major Support Level (S3) sits at $16,254.

An adverse crypto market event would bring sub-$16,000 into play.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat below the 100-day EMA, currently at $16,765. The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA eased back from the 200-day EMA, delivering mixed signals.

A move through the 100-day EMA ($16,765) and R1 ($16,801) would support a run at R2 ($16,911) and the 200-day EMA ($16,938). A breakout from the 50-day EMA would send a bullish signal. However, a fall through the 50-day EMA ($16,686) would bring the Major Support Levels into view.