Bitcoin Fear & Greed Index Avoids sub-40 Despite BTC Pullback

Key Insights:

• On Tuesday, bitcoin (BTC) extended the losing streak to three sessions, with BTC falling short of $25,000 for the first time in three sessions.
• China’s economic indicators from Monday continued to test support for riskier assets as recession fears lingered.
• The Bitcoin Fear & Greed Index fell from 44/100 to 41/100, aligned with BTC’s third session in the red.

On Tuesday, bitcoin (BTC) fell by 1.60%. Following a 0.87% decline from Monday, BTC ended the day at $23,859. Notably, BTC ended the day at sub-$24,000 for the first time in five sessions as BTC extended its losing streak to three. BTC also fell short of $25,000 for the first time in three sessions.

A bullish start to the day saw BTC rise to an early high of $24,247. Falling short of the First Major Resistance Level (R1) at $24,942, BTC fell to a low of $23,673.

However, steering clear of the First Major Support Level (S1) at $23,522, BTC wrapped up the day at $23,859.

There were no crypto news events to influence, leaving BTC and the broader market in the hands of market risk sentiment. Recession fears left the NASDAQ 100 down 0.19% for the Tuesday session. Crude oil prices also reflected the shift in investor sentiment, with WTI falling by 3.22%.

After briefly decoupling on Monday due to the influence of China’s economic indicators, the correlation between the crypto market and the NASDAQ 100 strengthened on Tuesday.

Bitcoin Fear & Greed Index Responds to the BTC Downtrend

Today, the Fear & Greed Index slipped from 44/100 to 41/100. Another bitcoin loss and a failure to revisit $25,000 weighed on investor sentiment. Uncertainty over the global economic outlook and Fed monetary policy also pressured riskier assets.

Later today, the FOMC meeting minutes could deliver clarity on what to expect from the September meeting. US economic indicators support another hike despite the weak NY Empire State Manufacturing numbers.

However, the Index needs to avoid sub-40 to support a return to $25,000. The bitcoin bulls await an Index return to the Neutral zone to target $30,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.07% to $23,876.

Technical Indicators

BTC needs to move through the $23,926 pivot to target the First Major Resistance Level (R1) at $24,179 and the Tuesday high of $24,247.

BTC would need a bullish start to the session to support a return to $24,000.

An extended crypto rally would see BTC test the Second Major Resistance Level (R2) at $24,499 and resistance at $25,000. The Third Major Resistance Level (R3) sits at $25,074.

Failure to move through the pivot would bring the First Major Support Level (S1) at $23,605 into play. Barring an extended sell-off, BTC should steer clear of sub-$23,500 and the Second Major Support Level (S2) at $23,352.

The Third Major Support Level (S3) sits at $22,778.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. This morning, bitcoin sat above the 100-day EMA, currently at $23,684.

The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA, delivering mixed price signals.

A breakout from the 50-day EMA ($24,006) would support a run at R1 ($24,179) to bring $25,000 back into play.

However, a pullback from the 50-day EMA could see BTC test the 100-day EMA, currently at $23,684, and S1 ($23,605).

Trend Analysis

Looking at the trends, a move through the August high of $25,203 and $25,500 would target the June high of $31,956. A break through the 50-day EMA, currently at $24,006, would support the current upward trend. From $32,000, BTC should have a clear run at the May high of $40,004.

For the bears, the June 18 low of $17,601 would be the next target, with a fall through $20,000 and the July low of $18,768 likely to test investor resilience.

However, as shown below, BTC is on a trend of higher lows, supporting a more bullish outlook.