Bitcoin Fear & Greed Index Inches Higher to Suggest Investor Resilience

Key Insights:

• On Monday, bitcoin (BTC) resumed the downward trend that had paused on Sunday, falling 1.63% to end the day at $19,128.
• Russia’s missile attacks on cities in Ukraine and hawkish Fed chatter delivered another NASDAQ 100 decline, leaving BTC and the broader market in negative territory.
• However, the Bitcoin Fear & Greed Index defied gravity by rising from 22/100 to 24/100.

On Monday, bitcoin (BTC) fell by 1.63%. Reversing a 0.13% gain from Sunday, BTC ended the day at $19,128. Notably, BTC fell short of $20,000 for the third consecutive session while avoiding a return to sub-$19,000.

A bullish start to the day saw BTC rise to an early high of $19,527. Coming up short of the First Major Resistance Level (R1) at $19,556, BTC slid to a late low of $19,000. BTC fell through the First Major Support Level (S1) at $19,329 and the Second Major Support Level (S2) at $19,214 to end the day at $19,128.

News of Russian missile attacks on cities in Ukraine during rush hour sent riskier assets into negative territory. However, BTC and the broader crypto market recovered before the second wave of selling. Hawkish Fed chatter and concerns over the impact of Fed policy on the economy sent riskier assets back into negative territory.

With the markets now resigned to another 75-basis point Fed rate hike in November, the focus has turned to December. The probability of a 75-basis point Fed hike in December stands at 28.3%, up from 23.4% on Friday and 0% on September 30. This week’s CPI report could nudge the number higher to further test buyer appetite.

The continued influence of US economic indicators and the Fed on the crypto market left the correlation with the NASDAQ 100 intact. On Monday, the NASDAQ 100 fell by 1.04%. This morning, the NASDAQ Mini was up 31.25 points to deliver modest BTC price support.

Later today, there are no US economic indicators for the markets to consider, leaving FOMC member chatter and the IMF meetings in focus.

The Fear & Greed Index Defies Gravity to Suggest Investor Resilience

Today, the Fear & Greed Index increased from 22/100 to 24/100. While remaining within the Extreme Fear zone, the upswing came despite BTC hitting reverse to test support at $19,000 on Monday.

The Index movements continue to suggest investor resilience and an acceptance of the Fed’s policy moves. However, the likely impact of the Fed’s policy moves on the global economy has pegged the Index back from forming an upward trend.

For the bulls, the Index will need to continue avoiding sub-20/100 to support a shift in sentiment. However, a fall to sub-20/100 would signal a BTC slide to sub-$18,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.42% to $19,048. A bearish start to the day saw BTC fall from an early high of $19,127 to a low of $18,957.

Technical Indicators

BTC needs to move through the $19,218 pivot to target the First Major Resistance Level (R1) at $19,437 and the Monday high of $19,527. A BTC return to $19,500 would signal a bullish session. However, investor angst over the Fed and the prospects of hawkish Fed rate hikes remain crypto headwinds.

In the case of an extended rally, BTC should move through the Second Major Resistance Level (R2) at $19,745 to target $20,000. The Third Major Resistance Level (R3) sits at $20,272.

Failure to move through the pivot would likely see BTC test the First Major Support Level (S1) at $18,910. Barring an extended sell-off, BTC should avoid sub-$18,500. The Second Major Support Level (S2) at $18,691 should limit the downside.

The Third Major Support Level (S3) sits at $18,164.

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 $19,541.

On Monday, the 50-day EMA crossed through the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA. The bearish cross and the 100-day EMA pullback delivered bearish price signals.

Following Monday’s bearish cross, BTC would need to move through R1 ($19,437) and the 50-day EMA ($19,541) to ease selling pressure. However, failure to move through the 50-day EMA ($19,541) would leave sub-$19,000 support levels in play.