Bitcoin (BTC) Fear & Greed Index Holds Steady Despite BTC at Sub-$20,000

Key Insights:

• On Saturday, bitcoin (BTC) visited sub-$20,000 in a 1.03% loss as investors responded further to Fed Chair Powell’s speech.
• Fed Chair Powell sent riskier assets into a tailspin on Friday, and there were no crypto events to divert the focus away from the Fed.
• The Bitcoin Fear & Greed Index held steady at 28/100 despite the BTC decline to sub-$20,000.

On Saturday, bitcoin (BTC) fell by 1.03%. Following a 6.03% slide from Friday, BTC ended the day at $20,049.

A mixed start to the day saw BTC strike an early high of $20,386 before hitting reverse. Falling short of the First Major Resistance Level (R1) at $21,380, BTC fell to a day low of $19,773. However, steering clear of the First Major Support Level (S1) at $19,639, BTC revisited $21,100 before easing back.

Investors continued to respond to Fed Chair Powell’s speech that warned the markets of a likely fallout from the Fed’s policy plans to bring inflation to target. For the crypto market, the prospect of sizeable rate hikes will also end the free money environment that has supported riskier assets.

On Friday, Powell talked of the likely fallout from the Fed’s goal, including the impact on labor market conditions. The Fed Chair removed any hope of a policy reversal by highlighting the need for a period of sustained below-trend growth alongside a weaker labor market to tame inflation.

Bitcoin Fear & Greed Index Holds at 28/100 While BTC Falls to sub-$20,000

Today, the Fear & Greed Index remained unchanged at 28/100. The Index held steady despite BTC falling to sub-$20,000 for the first time since July 14. The Index above the Extreme Fear zone remains significant for the BTC bulls.

An Index return to 40/100 would support a BTC move to $25,000. However, the latest 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 up 0.11% to $20,072.

A choppy start to the Sunday session saw BTC fall to a low of $19,933 before hitting a high of $20,082.

Technical Indicators

BTC needs to avoid the $20,069 pivot to target the First Major Resistance Level (R1) at $20,366 and the Saturday high of $20,386.

BTC would need a marked shift in investor sentiment to support a return to $20,300.

An extended crypto rally would see BTC test the Second Major Resistance Level (R2) at $20,682 and resistance at $21,000. The Third Major Resistance Level (R3) sits at $21,295.

A fall through the pivot would bring the First Major Support Level (S1) at $19,753 into play. Barring an extended sell-off, BTC should steer clear of sub-$19,000. The Second Major Support Level at $19,456 should limit the downside.

The Third Major Support Level (S3) sits at $18,843.

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 $21,306.

Following Monday’s bearish cross, the 100-day EMA pulled back from the 200-day EMA, with the 50-day EMA sliding 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 ($20,386) and R2 ($20,682) would bring R3 ($21,295) the 50-day EMA ($21,306) 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 Saturday low of $19,773 would support a move back towards the 50-day EMA to ease selling pressure.

For the bears, Saturday’s low 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.