Bitcoin (BTC) Fear & Greed Index Falls on US Inflation Fears

Key Insights:

• Bitcoin (BTC) fell by 3.18% on Tuesday to log a fifth consecutive day in the red.
• Investor jitters over inflation hit riskier assets, with bitcoin tracking the NASDAQ 100 into the red.
• The Bitcoin Fear & Greed Index continued its reversal from a July high of 24/100, falling from 16/100 to 15/100 this morning.

On Tuesday, bitcoin (BTC) fell by 3.18%. Following a 4.33% slide on Monday, bitcoin ended the day at $19,310. Bitcoin extended its losing streak to 5 sessions.

A mixed start to the day saw BTC rise to an early high of $20,036 before hitting reverse.

Falling short of the First Major Resistance Level at $20,571, BTC slid to a late low of $19,230.

BTC slid through the First Major Support Level at $19,592 to end the day at sub-$19,500. The Second Major Support Level at $19,242 limited the downside late in the session.

Market angst over US inflation weighed on riskier assets, with another pickup in US inflation likely to force the Fed into a 75-basis point rate hike this month. US inflation figures for June are due later today.

Risk aversion spread from the US equity markets, with bitcoin tracking the NASDAQ 100 into the red. On Tuesday, the NASDAQ 100 fell by 0.95%.

At the time of writing, the NASDAQ 100 Mini was up 0.75 points.

Bitcoin Fear & Greed Index Slips back to 15/100

This morning, the Fear & Greed Index declined from 16/100 to 15/100. Market angst over US inflation and Fed monetary policy continued to weigh on investor sentiment.

This morning, the Index continued its reversal from a July high of 24/100, with another spike in US inflation likely to bring sub-10/100 levels back into play.

A fall deeper into the “Extreme Fear ” zone would signal another bitcoin reversal, with the bitcoin bears eyeing the current year low of $17,601.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.37% to $19,381.

A range-bound start to the day saw BTC fall to an early low of $19,244 before rising to a high of $19,381.

Technical Indicators

BTC needs to move through the $19,523 pivot to target the First Major Resistance Level (R1) at $19,822 and test resistance at the Tuesday high of $20,036.

BTC would need a bullish session to support a return to $20,000.

An extended rally would test the Second Major Resistance Level (R2) at $20,333 and resistance at $21,000. The Third Major Resistance Level (R3) sits at $21,137.

Failure to move through the pivot would bring the First Major Support Level (S1) at $19,016 into play.

Barring an extended sell-off, BTC should avoid sub-$18,500, with the Second Major Support Level (S2) at $18,717 would likely limit the downside.

The Third Major Support Level (S3) sits at $17,913.

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 $20,433.

The 50-day EMA eased back from the 100-day EMA. The 100-day EMA slipped back from the 100-day EMA; bitcoin price negative.

A further pullback of the 50-day EMA from the 100-day EMA would bring sub-$19,000 into play.

However, a bullish cross of the 50-day EMA through the 100-day EMA would support a breakout from R1 and the 50-day EMA to bring R2 and the 100-day EMA into play. The 100-day EMA currently sits at $20,702.

On a trend analysis basis, bitcoin would need a move through a May 30 high of $32,503 to target the March 28 high of $48,192. Near-term, resistance at $25,000 will likely be the first test should the upward trend resume.

For the bears, the June 18 low of $17,601 would be the next target.