Bitcoin (BTC) Fear & Greed Index Enters the Fear Zone to Target 30/100

Key Insights:

• On Monday, bitcoin (BTC) rose by 3.76% to end the day at $20,307.
• Bitcoin decoupled from the NASDAQ 100, which saw red throughout the Monday session.
• The Bitcoin Fear & Greed Index increased from 24/100 to 27/100, supporting the Index’s move out of the Extreme Fear zone.

On Monday, bitcoin (BTC) rose by 3.76%. Reversing a 2.36% decline from Sunday, BTC ended the day at $20,307.

A bearish start to the Monday session saw BTC fall to a low of $19,557 before making a move. Steering clear of the First Major Support Level (S1) at $19,351, BTC rallied to a late afternoon high of $20,415.

BTC broke through the First Major Resistance Level (R1) at $19,980. However, coming up against the Second Major Resistance Level (R2) at $20,389, BTC eased back to end the day at sub-$20,307.

A quiet US economic calendar and a lack of FOMC member chatter allowed dip buyers to deliver much-needed support. Market sentiment towards the Ethereum (ETH) Merge and other crypto news drew investors from the sidelines.

Significantly, the BTC rebound to $20,000 came despite the NASDAQ 100 falling by 1.02%. However, US economic indicators will test crypto investor sentiment later today. US JOLTs job openings and consumer confidence figures are due out. Positive numbers would support the Fed’s current monetary policy mantra.

This morning, the NASDAQ 100 Mini was up 25.5 points.

Bitcoin Fear & Greed Index Exits the Extreme Fear Zone

Today, the Fear & Greed Index rose from 24/100 to 27/100. After succumbing to market forces on Monday, with a fall into the Extreme Fear zone. BTC returned to $20,000 to provide support.

Avoiding the August low of $19,540, BTC bounced back to end Monday’s session at $20,307, supporting the modest improvement in investor sentiment.

However, the Fear & Greed Index remains on the border of the Extreme Fear zone. Failing to return to 30/100 leaves the Extreme Fear zone and further bearish BTC moves on the table.

For the bulls, the Index needs a move through 40/100 to support a BTC return to $25,000. However, the fall into the Extreme Fear zone leaves a BTC visit to the 2022 low of $17,605 in play.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.33% to $20,240.

Technical Indicators

BTC needs to avoid the $20,093 pivot to target the First Major Resistance Level (R1) at $20,629. BTC needs to steer clear of sub-$20,000 to support a breakout from the Monday high of $20,415.

An extended crypto rally would see BTC test the Second Major Resistance Level (R2) at $20,951 and resistance at $21,000. The Third Major Resistance Level (R3) sits at $21,809.

A fall through the pivot would bring the First Major Support Level (S1) at $19,771 into play. Barring an extended sell-off, BTC should steer clear of sub-$19,000. The Second Major Support Level at $19,235 should limit the downside.

The Third Major Support Level (S3) sits at $18,377.

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 $20,818.

The 100-day EMA pulled back from the 200-day EMA, with the 50-day EMA falling back from the 200-day EMA, delivering bearish price signals.

A further pullback of the 50-day EMA from the 200-day EMA would bring the Major Support levels into play.

For the bulls, a BTC move through R1 ($20,629) would bring the 50-day EMA ($20,818) and R2 ($20,951) into view.

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 the Sunday low of $19,540 would support a move back towards the 50-day EMA to ease selling pressure.

For the bears, Sunday’s August low of $19,540 continued a trend of new lows, with the June 18 low of $17,601 remaining the target. A fall through the July low of $18,768 would bring the June and 2022 low into play.