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BTC Fear & Greed Index Avoids Extreme Fear Despite NASDAQ Loss

By:
Bob Mason
Updated: Nov 29, 2022, 02:57 UTC

It was a bearish Monday session for BTC, with the NASDAQ Composite Index sending BTC into the red on the news of China protests.

BTC in a recessionary fear vice- FX Empire

Key Insights:

  • On Monday, bitcoin (BTC) fell by 1.36% to end the day at $16,212, with support at $16,000 limiting the downside.
  • Risk aversion stemming from protests in China weighed on the NASDAQ Index and BTC, with news of BlockFi filing for bankruptcy adding to the bearish mood.
  • However, the Fear & Greed Index slipped from 28/100 to 26/100, reflecting investor resilience and the limited impact of the BlockFi filing on the investor mood.

On Monday, bitcoin (BTC) fell by 1.36%. Following a 0.15% decline on Sunday, BTC ended the day at $16,212. Notably, BTC avoided sub-$16,000 for the sixth consecutive day while extending the losing streak to five sessions.

A mixed start to the day saw BTC rise to an early high of $16,487. Coming up short of the First Major Resistance Level (R1) at $16,555, BTC slid to a late afternoon low of $16,002. BTC fell through the day’s Major Support Levels before a late move back through the Third Major Support Level (S3) at $16,097 to end the day a $16,212.

The US Thanksgiving holidays ended with news of protests across China over the government’s zero-COVID policy. Unprecedented scenes weighed on riskier assets, sending BTC and the broader market into reverse in the final hour of the Sunday session and through the early hours of Monday.

The bearish mood weighed on the NASDAQ Composite Index, which fell by 1.58% on Monday, with the S&P500 declining by 1.54%.

News of BlockFi filing for bankruptcy added to the bearish mood, leaving BTC and the crypto in the red for the session. However, the impact was muted compared with the collapse of FTX.

Later today, the US economic calendar will draw interest, with US consumer confidence in focus. A sharp increase in consumer confidence would raise doubts over a December Fed pivot ahead of this week’s labor market numbers.

The NASDAQ mini was up 21.25 points this morning, providing early support. While the NASDAQ will provide direction, FTX-related news updates will also influence.

NASDAQ correlation.
NASDAQ – BTCUSD 291122 5 Minute Chart

The Fear & Greed Index Slips on NASDAQ Index and BTC Pullback

Today, the BTC Fear & Greed Index fell from 28/100 to 26/100. Significantly, the Index avoided a return to the Extreme Fear zone despite BTC testing support at $16,000. News of BlockFi filing for bankruptcy also failed to send the Index back into the Extreme Fear zone.

This morning’s move suggests investor resilience and further supports suggestions of the market bottoming out. However, while sentiment toward FTX contagion has improved, downside risks remain. FTX contagion and regulatory risk will remain crypto headwinds over the near term.

Avoiding sub-20/100 remains the key near-term. The bulls will need to target the pre-FTX collapse high of 40/100 (Nov 6) to support a BTC run at $20,000.

Fear and Greed Index avoids the Extreme Fear zone.
Fear & Greed 291122

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.46% to $16,287. A mixed start to the day saw BTC fall to an early low of $16,101 before rising to a high of $16,298.

BTC finds early support.
BTCUSD 291122 Daily Chart

Technical Indicators

BTC needs to avoid the $16,234 pivot to target the First Major Resistance Level (R1) at $16,465 and the Monday high of $16,487. A return to $16,500 would signal a bullish session. However, BTC would need the NASDAQ and friendly FTX-linked news updates to support a breakout session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $16,719 and resistance at $17,000. The Third Major Resistance Level (R3) sits at $17,204.

A fall through the pivot would bring the First Major Support Level (S1) at $15,980 into play. Barring an extended sell-off, BTC should avoid the Second Major Support Level (S2) at $15,759. The Third Major Support Level (S3) sits at $15,264.

However, negative FTX-related news or a risk-off fueled sell-off would bring sub-$15,000 levels into play. Investors are hoping that FTX assets would cover creditors.

BTC resistance levels in play above the pivot.
BTCUSD 291122 Hourly Chart

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 $16,549. The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

A breakout from R1 ($16,465) and the 50-day EMA ($16,549) would support a move through R2 ($16,719) to target $17,000. However, a failure to break out from the 50-day EMA ($16,549) would leave BTC under pressure.

EMAs remain bearish.
BTCUSD 291122 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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