BTC Fear & Greed Index Anchored Deep Within the Extreme Fear Zone
Key Insights:
- On Friday, bitcoin (BTC) rose by 0.50%, marking the eighth gain in ten sessions.
- The gain came despite a bearish session for the NASDAQ 100, which struggled as recession fears resurfaced.
- The Bitcoin Fear & Greed Index rose from 20/100 to 22/100, supported by the modest BTC gain on the day.
On Friday, bitcoin (BTC) rose by 0.50%. Partially reversing a 2.57% fall from Thursday, BTC ended the day at $19,813.
During a mixed morning, BTC rose to a late morning high of $19,894. However, coming up short of the First Major Resistance Level (R1) at $20,193, BTC fell to a late afternoon low of $19,347. BTC fell through the First Major Support Level (S1) at $19,371 before wrapping up the day at $19,813.
Your capital is at risk
A bearish NASDAQ 100 session weighed on BTC through the afternoon session. However, a NASDAQ 100 partial recovery from deep in the red delivered BTC support. BTC returned to positive territory after the US closing bell.
Investor jitters towards the US economic outlook tested support for riskier assets. News of FedEx (FDX) withdrawing its financial forecasts, citing worsening economic conditions, weighed.
However, easing bets of a percentage point Fed rate hike provided riskier assets with a cushion. On Friday, the NASDAQ 100 fell by 0.90%, ending the week down 5.77%.
Bitcoin Fear & Greed Index Anchored in the Extreme Fear Zone
Today, the Fear & Greed Index rose from 20/100 to 22/100. The Index responded to a modest BTC increase. However, the Index remained deep within the Extreme Fear zone, with BTC failing to revisit $20,000 for the first time since September 8.
While the Index fell back into the Extreme Fear zone, avoiding sub-20/100 was 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 up 0.55% to $19,921. A bullish start to the day saw BTC rise from an early low of $19,786 to a high of $20,073.
BTC broke through the First Major Resistance Level at $20,022 before easing back to sub-$20,000.
Technical Indicators
BTC needs to avoid the $19,685 pivot to retarget the First Major Resistance Level (R1) at $20,022 and the morning high of $20,073. While the NASDAQ 100’s partial recovery provided early support, investors will need to continue to brush aside recession fears.
In the case of an extended rally, BTC should test the Second Major Resistance Level (R2) at $20,232 and resistance at $20,500. The Third Major Resistance Level (R3) sits at $20,779.
A fall through the pivot would bring the First Major Support Level (S1) at $19,475 into play. Barring an extended sell-off, BTC should avoid sub-$19,000. The Second Major Support Level (S2) at $19,138 should limit the downside.
The Third Major Support Level (S3) sits at $18,591.
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 $20,419.
Following Thursday’s bearish cross, 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 price signals.
A move through R1 ($20,022) and R2 (20,232) would give the bulls a run at the 50-day EMA ($20,419). However, failure to move through the 50-day EMA would leave BTC under pressure.
Trend Analysis
Looking at the trends, BTC would need a move through the August high of $25,203 and $25,500 to target the June high of $31,956. Avoiding a fall through the September low of $18,549 would support a move back towards $25,000.
However, the trend has turned bearish after Tuesday and Thursday’s sell-off. A fall through the September low of $18,549 would bring sub-$18,000 and the June low of $17,601 into play.