Bitcoin Fear & Greed Index Slips on BTC Fall to Sub-$21,000

Key Insights:

• On Monday, bitcoin (BTC) joined the broader crypto market in the red.
• Market jitters over a hawkish Fed resurfaced, as investors turned their attention to this week’s Jackson Hole Symposium.
• The Bitcoin Fear & Greed Index fell from 29/100 to 28/100, supporting a BTC return to sub-$20,000.

On Monday, bitcoin (BTC) fell by 0.55%. Partially reversing a 1.76% gain from Sunday, BTC ended the day at $21,395.

A bearish start to the day saw BTC slide to a late morning low of $20,908. BTC fell through the First Major Support Level (S1) at $21,121 before striking a high of $21,537.

Falling short of the First Major Resistance Level (R1) at $21,851, BTC slid back through S1 before ending the day at $21,395. A late rebound reduced the deficit on the day.

Risk aversion from the global financial markets spilled over to the crypto markets, reversing gains from the Sunday session. Investor angst over Fed monetary policy sent riskier assets into the deep red, with the NASDAQ 100 sliding by 2.55%.

At the time of writing, the NASDAQ 100 Mini was 41.25 points to deliver early BTC support.

The markets are expecting Fed Chair Powell to deliver a hawkish speech at the Jackson Hole Symposium on Friday. Ahead of the Powell speech, there are also some key US indicators for the markets to digest.

From the US, it is a busy week ahead on the economic calendar. Private sector PMIs (Tue), core durable goods orders (Wed), jobless claims and Q2 GDP numbers (Thurs), inflation (Fri), and personal spending (Fri) figures will be in focus.

For the crypto market, it will be a choppy week. Disappointing US economic indicators will reignite fears of a US economic recession. Positive numbers will fuel market expectations of a hawkish Fed Chair Powell speech.

Bitcoin Fear & Greed Index Remains on the Border of Extreme Fear

Today, the Fear & Greed Index slipped from 29/100 to 28/100, inching back towards the Extreme Fear border. The latest decline reaffirmed the downward trend from an August 14 high of 47/100. The downward trend suggests further BTC downside over the near term.

The Index needs a move through 40/100 to support a BTC return to $25,000. However, a fall into the Extreme Fear zone would see BTC at sub-$20,000 to give the bears a look at the current year’s low of $17,605.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.11% to $21,418.

Technical Indicators

BTC needs to avoid the $21,280 pivot to target the Monday high of $21,537 and the First Major Resistance Level (R1) at $21,652

BTC would need a bullish morning session to support a return to $21,500.

An extended crypto rally would see BTC test the Second Major Resistance Level (R2) at $21,909 and resistance at $22,000. The Third Major Resistance Level (R3) sits at $22,538.

A fall through the pivot would bring the First Major Support Level (S1) at $21,023 into play. Barring another extended sell-off, BTC should steer clear of sub-$20,500. The Second Major Support Level at $20,651 should limit the downside. The Third Major Support Level (S3) sits at $20,022.

Today’s US private sector PMI numbers will influence. Weak service sector PMI figures would bring S3 into play. Strong numbers could also be bearish, with the Fed likely to seize the opportunity to deliver another sizeable rate hike in response.

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 $22,251.

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 sub-$20,000 into play.

For the bulls, a BTC move through R1 ($21,652) and R2 ($21,909) would bring the 50-day EMA ($22,251) 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 most recent low of $20,769 would support a move through the 50-day EMA to ease selling pressure.

For the bears, the June 18 low of $17,601 remains the target. A fall through $20,000 and the July low of $18,768 would likely test investor resilience.