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BTC Fear & Greed Index Breaks into the Fear Zone on BTC Movement

By:
Bob Mason
Published: Nov 27, 2022, 02:43 GMT+00:00

It was a bearish session for BTC on Saturday. However, avoiding sub-$16,000 supported an Index move into the Fear zone, suggesting a BTC upswing.

BTC tech analysis - FX Empire

Key Insights:

  • On Saturday, bitcoin (BTC) fell by 0.36% to end another range-bound session at $16,460.
  • There were no cues for investors, with the US Thanksgiving holidays sending crypto market volumes lower.
  • However, the Fear & Greed Index rose from 22/100 to 26/100, returning to the Fear zone for the first time since the collapse of FTX.

On Saturday, bitcoin (BTC) slipped by 0.36%. Following a 0.52% loss on Friday, BTC ended the day at $16,460. Notably, BTC avoided sub-$16,000 for the fourth consecutive session.

A bullish start to the day saw BTC rise to an early high of $16,697. BTC broke through the First Major Resistance Level (R1) at $16,639 before falling to a late low of $16,389. However, steering clear of the First Major Support Level (S1) at $16,376, BTC found late support to end the day at $16,460.

There was no crypto news event to provide direction on Saturday, leaving BTC in a tight range. Trading volumes have fallen over the US Thanksgiving Holidays. Investors will also be holding out for updates from the FTX bankruptcy proceedings. News of more assets to make creditors whole would be BTC-positive.

Trading volumes fall.
CMC BTC Trading Volume 271122

Another quiet session would leave the NASDAQ mini to provide direction in the final hour of today’s session. A rise in the Fear & Greed Index suggests improved investor sentiment. However, downside risks remain, with the FTX contagion and regulatory risks being crypto headwinds.

For the broader market, the Binance pledge of $1 billion, interest in FTX crypto assets, and the $1.24 billion in FTX cash holdings will limit the damage on FTX creditors. However, the cascade effect could see other platforms face a different situation should liquidity dry up.

NASDAQ correlation.
NASDAQ – BTCUSD 271122 Daily Chart

The Fear & Greed Index Exits the Extreme Fear Zone

Today, the BTC Fear & Greed Index increased from 22/100 to 26/100. Significantly, the Index moved into the Fear zone for the first time since the collapse of FTX. The upside came despite BTC moving within a $308 range on Saturday.

BTC avoiding sub-$16,000 for a fourth consecutive session was likely a contributory factor. Debtor updates on FTX liquid assets, market interest in FTX assets, and a lack of news of more exchanges facing liquidity crises have been crypto-positive.

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.

BTC Fear & Greed Index exits the Extreme Fear zone.
Fear & Greed 271122

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.17% to $16,488. A range-bound start to the day saw BTC rise to an early high of $16,508 before easing back.

BTC finds early support.
BTCUSD 271122 Daily Chart

Technical Indicators

BTC needs to move through the $16,515 pivot to target the First Major Resistance Level (R1) at $16,642 and the Saturday high of $16,697. A return to $16,600 would signal a bullish session. However, BTC would need friendly FTX-linked news updates to support a breakout session. A lack of news could see BTC move within tight ranges.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $16,823 and resistance at $17,000. The Third Major Resistance Level (R3) sits at $17,131.

Failure to move through the pivot would leave the First Major Support Level (S1) at $16,334 in play. Barring an extended sell-off, BTC should avoid sub-$16,000. The Second Major Support Level (S2) at $16,207 should limit the downside. However, negative FTX-related news could send BTC to sub-$16,000.

The Third Major Support Level (S3) sits at $15,899.

BTC support levels in play below the pivot.
BTCUSD 271122 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 $16,542. The 50-day EMA slipped back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A breakout from the 50-day EMA ($16,542) would support a move through R1 ($16,642) to target R2 ($16,823) and $17,000. However, a failure to break out from the 50-day EMA ($16,542) would leave S1 ($16,334) in play.

BTC EMAs bearish.
BTCUSD 271122 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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