BTC Fear & Greed Index Eyes the Fear Zone on Range-Bound BTC Session

Key Insights:

• On Saturday, bitcoin (BTC) rose by 0.06%. Marking the sixth gain from fourteen sessions, BTC ended the day at $16,695.
• Another eventless session left BTC range-bound for a second consecutive day. Contagion and regulatory risk left BTC short of $17,000.
• The Bitcoin Fear & Greed Index rose from 23/100 to 24/100. The range-bound session eased investor fear of another sell-off.

On Saturday, bitcoin (BTC) rose by 0.06%. Following a 0.01% gain on Friday, BTC ended the day at $16,695. Notably, BTC rose for the third consecutive day while falling short of $17,000 for the fourth time since 2020.

A mixed start to the day saw BTC fall to an early low of $16,538. However, steering clear of the First Major Support Level (S1) at $16,495, BTC rose to a late high of $16,811. Coming up short of the First Major Resistance Level (R1) at $16,926, BTC slipped back to end the day at $16,695.

Contagion risk stemming from the collapse of FTX and regulatory risk left BTC short of $17,000 for a third consecutive day.

A lack of crypto news left investors to consider the risk of more crypto platforms freezing withdrawals. While investors anticipate further consolidation following the collapse of Terra Labs and FTX, regulatory risk has resurfaced.

Regulators have vocalized the need for greater oversight to protect consumers. Certain jurisdictions are likely to take more heavy-handed measures than others. The Financial Conduct Authority (FCA) wants to take extreme measures, proposing to ban crypto platforms in the UK.

Next month, US lawmakers will also be in the spotlight, with a series of hearings set up to drag former FTX CEO Sam Bankman-Fried over the coals.

Today, investors need to monitor the crypto news wires and regulatory chatter. In the final hour (UTC), the NASDAQ mini could also provide direction should market conditions remain stable.

The Fear & Greed Index Inches Toward the Fear Zone

Today, the Fear & Greed Index rose from 23/100 to 24/100. BTC rose for a third consecutive day on Saturday, easing investor fear of another BTC sell-off. Trading volumes have fallen, reflecting the market’s wait-and-see approach.

Contagion risk lingers, with uncertainty over the crypto regulatory landscape another headwind.

However, further market normalization would support an Index return to the Fear zone and a BTC return to $20,000. Avoiding sub-20/100 remains the key for the bulls. A fall to sub-20/100 would raise the risk of sub-$10,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.08% to $16,682. A range-bound start to the day saw BTC rise to an early high of $16,742 before falling to a low of $16,663.

Technical Indicators

BTC needs to avoid the $16,681 pivot to target the First Major Resistance Level (R1) at $16,825. A move through the Saturday high of $16,811 would signal a bullish session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $16,954 and resistance at $17,000. News updates need to be crypto-friendly to support a return to $17,000.

The Third Major Resistance Level (R3) sits at $17,227.

A fall through the pivot would bring the First Major Support Level (S1) at $16,552 into play. Barring another extended sell-off, BTC should avoid the Second Major Support Level (S2) at $16,408. However, negative FTX-related news could send BTC to sub-$16,000.

The Third Major Support Level (S3) sits at $16,135.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, BTC sat below the 50-day EMA, currently at $16,969. The 50-day EMA fell back from the 200-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

A move through R1 ($16,825) would give the bulls a run at R2 ($16,954) and the 50-day EMA ($16,969). However, failure to move through the 50-day EMA would bring S1 ($16,552) into play.