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Bitcoin (BTC) Rallies Despite the Fear & Greed Index at a 2022 Low

By:
Bob Mason
Published: May 17, 2022, 08:09 GMT+00:00

Bitcoin (BTC) makes an early move this morning, despite a fall in the Fear & Greed Index, with the NASDAQ 100 providing the early support.

Golden bitcoins on the black background closeup. Cryptocurrency virtual money

Key Insights:

  • On Monday, Bitcoin (BTC) fell by 4.66% to end a 3-day winning streak and reverse a 4.15% gain from Sunday.
  • Monday’s pullback left the Bitcoin Fear & Greed Index at 8/100, the lowest level since a March 14, 2020 low of 8/100.
  • Bitcoin (BTC) technical indicators flash red, with bitcoin sitting below the 50-day EMA.

Bitcoin (BTC) slid by 4.66% on Monday. Reversing a 4.15% gain from Sunday, bitcoin ended the day at $29,839.

A choppy session saw bitcoin rise to an early high of $31,296 before sliding to a day low of $29,104.

While resistance at $29,000 proved key to preventing heavier losses, the Fear & Greed Index sends a bearish signal.

The Bitcoin Fear & Greed Index Falls to a 2022 Low of 8/100

This morning, the Bitcoin Fear & Greed Index fell from 10/100 to 8/100, its lowest level since March 14, 2020, when the Index also stood at 8/100.

The Index falls to lowest level since March 2020.
Fear & Greed 170522

Monday’s BTC loss came as investors across the global equity markets and the crypto market responded to dire economic data from China.

The weak stats coupled with the threat of a recession left the NASDAQ 100 down 1.20%. Fed Chair Powell’s assurances on the rate hike front have delivered support. There has been little chatter on the economic outlook, however.

While the correlation between bitcoin and the NASDAQ strengthened marginally on Monday, the knock-on effects from last week’s TerraUSD (UST) de-pegging remain an area of focus.

In the aftermath of the TerraUSD collapse, the market will need to consider a shift in the regulatory landscape and investor sensitivity to any adverse news that could send another crypto into a tailspin.

TerraUSD breaks BTC correlation with the NASDAQ.
BTCNASDAQ 1705 Daily Chart

At the time of writing, the NASDAQ Mini was up 147 points to deliver BTC support.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 2.10% to $30,465.

A mixed start to the day saw bitcoin fall to an early morning low of $29,757 before striking a high of $30,508.

Bitcoin finds early support despite Fear & Greed Index slide.
BTCUSD 170522 Daily Chart

Technical Indicators

BTC will need to avoid the $30,083 pivot to target the First Major Resistance Level at $31,058.

BTC would need the broader crypto market to support a breakout from this morning’s high of $30,508.

An extended rally would test the Second Major Resistance Level at $32,272 and resistance at $32,500. The Third Major Resistance Level sits at $34,464.

A fall through the pivot would test the First Major Support Level at $28,860. Barring another extended sell-off, BTC should steer clear of sub-$28,000 levels. The Second Major Support Level sits at $27,889.

A BTC move through $30,500 would support a breakout.
BTCUSD 170522 Hourly Chart.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. BTC sits below the 50-day EMA, currently at $30,980. This morning, the 50-day pulled back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA; BTC negative.

A move through the 50-day EMA would support a run at $35,000.

A move through the 50-day EMA would support a run at $35,000.
BTCUSD 170522 4 Hourly Chart.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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