BTC Fear & Greed Index Slides Despite BTC Gain, Signaling More Losses

Key Insights:

• On Sunday, bitcoin (BTC) ended a mini two-day losing streak, rising by 1.03% to end the week at $19,267.
• There were no events to provide direction, leaving dip buyers to deliver a reversal of Saturday’s losses and leave BTC flat for the week.
• The Bitcoin Fear & Greed Index fell from 24/100 to 20/100, with Fed fear a likely factor.

On Sunday, bitcoin (BTC) rose by 1.03%. Reversing a 0.60% decline from Saturday, BTC ended the week down by 0.91% to $19,267. Notably, BTC fell short of $20,000 for the ninth consecutive session while avoiding a return to sub-$19,000.

A mixed start to the day saw BTC slip to an early low of $19,067. Steering clear of the First Major Support Level (S1) at $18,966, BTC struck a late high of $19,428. BTC broke through the First Major Resistance Level (R1) at $19,202 and the Second Major Resistance Level (R2) at $19,332. However, falling short of $19,500, BTC fell through R2 to end the day at $19,267.

There were no events to change investor sentiment following Friday and Saturday’s bearish sessions. However, dip buyers contributed to the upside late in the day, though Fed fear continued to leave BTC short of $20,000.

A string of US economic indicators has fueled bets of 75-basis point Fed rate hikes in November and December. The more hawkish outlook left BTC in the red for the week.

This morning, the probability of a 75-basis point hike in November stood at 99.4% and 66.7% for December. Last week, the chance of a 75-basis point hike in November and December stood at 81.1% and 23.4%, respectively. However, the probability of a 75-basis point December hike eased from 69.8% on Friday.

With BTC and the broader crypto market tracking the NASDAQ 100, we expect the NASDAQ Mini to influence. This morning, the NASDAQ Mini was up 24 points.

The Fear & Greed Index Falls to 20/100 on Fed Fear

Today, the Fear & Greed Index fell from 24/100 to 20/100. The decline came despite a bullish BTC session, with investor sentiment towards Fed monetary policy likely to have pulled the Index deeper into the Extreme Fear zone.

The Index continues to move within the 20/100 to 24/100 range, which correlates with BTC’s tight ranges.

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 down 0.15% to $19,239. A range-bound start to the day saw BTC rise to an early high of $19,311 before falling to a low of $19,220.

Technical Indicators

BTC needs to move through the $19,254 pivot to target the First Major Resistance Level (R1) at $19,441. A BTC return to $19,500 would signal a bullish session. However, following the US economic indicators from last week, today’s stats and central bank chatter would need to be crypto-friendly.

Trade data from China and manufacturing numbers from the US will draw interest.

In the case of an extended rally, the Second Major Resistance Level (R2) at $19,615 would likely come into play. The Third Major Resistance Level (R3) sits at $19,976.

Failure to move through the pivot would leave the First Major Support Level (S1) at $19,080 in play. Barring an extended sell-off, the Second Major Support Level (S2) at $18,893 should limit the downside.

The Third Major Support Level (S3) sits at $18,532.

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 $19,288.

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

BTC needs to move through the 50-day EMA ($19,288) to target R1 ($19,441) and a return to $19,500. However, a failure to move through the 50-day EMA ($19,288) would give the bears a run at S1 ($19,080). The 200-day EMA sits at $19,640.