Bitcoin Fear & Greed Index Hits 46 as Bitcoin Eyes a Return to $25,000

Key Insights:

• On Friday, bitcoin (BTC) rose by 1.96%. While falling short of $25,000, BTC held onto the $24,000 handle for the first time since June 12.
• A pickup in US consumer sentiment and softer inflation expectations delivered support to riskier assets.
• The Bitcoin Fear & Greed Index increased from 42/100 to 46/100 to sit on the Fear/Neutral border.

On Friday, bitcoin (BTC) rose by 1.96%. Reversing a 0.07% decline from Thursday, BTC ended the day at $24,412. Notably, BTC ended the day at the $24,000 handle for the first time since June 12.

A bearish morning saw BTC slide to a mid-day low of $23,610. Steering clear of the First Major Support Level (S1) at $23,441, BTC rallied to a final hour high of $24,459.

Falling short of the First Major Resistance Level (R1) at $24,670 and $25,000, BTC slipped back to end the day at $24,412.

Following softer US inflation numbers on Wednesday and Thursday, US consumer sentiment figures delivered the breakout session.

According to prelim figures, the Michigan Consumer Sentiment Index jumped from 51.5 to 55.1 in August. Looking at the sub-components, the Michigan Inflation Expectations Indicator slipped from 5.2% to 5.0%.

Bitcoin and the broader market responded to the numbers, which were crypto-positive (see below).

The NASDAQ 100 responded to the upbeat consumer sentiment figures to deliver the BTC breakout. On Friday, the NASDAQ 100 rallied by 2.09% to end the week up 3.8%.

Bitcoin Fear & Greed Index Hits 46/100 to Sit on the Fear/Neutral Border

Today, the Fear & Greed Index jumped from 42/100 to 46/100, supported by a BTC hold onto the $24,000 handle. Market reaction to the US inflation figures continued to provide support. On Friday, US consumer sentiment and inflation expectation figures delivered further support, leading to the Index return to 46/100.

Now sitting on the Fear/Neutral border, the Index will need to move into the Neutral zone to affirm a shift in investor sentiment. The Index last visited the Neutral zone on April 6. A return to Neutral would support a BTC move through $25,000 to bring $30,000 into play.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.13% to $24,381.

Technical Indicators

BTC needs to avoid the $24,160 pivot to target the First Major Resistance Level (R1) at $24,711.

However, BTC would need a bullish start to the session to support a breakout from the Friday high of $24,459.

An extended crypto rally would see BTC test the Second Major Resistance Level (R2) at $25,010 and resistance at $25,500. The Third Major Resistance Level (R3) sits at $25,858.

A fall through the pivot would bring the First Major Support Level (S1) at $23,861 into play. Barring an extended sell-off, BTC should avoid sub-$23,500 and the Second Major Support Level (S2) at $23,312.

The Third Major Support Level (S3) sits at $22,462.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. This morning, bitcoin sat above the 50-day EMA, currently at $23,688.

The 50-day EMA pulled away from the 100-day EMA with the 100-day EMA widening from the 200-day EMA, the signals price positive.

A 50-day EMA widening from the 100-day EMA would support a run at R1 ($24,711) to bring $25,000 into play.

However, a fall through S1 ($23,861) and the 50-day EMA would likely see BTC support at the 100-day EMA ($23,327) and S2 ($23,312).

Trend Analysis

Looking at the trends, BTC would need a move through the August high of $24,896 and $25,000 to target the June high of $31,956. Avoiding a fall through the 50-day EMA, currently at $23,688, 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.