BTC Fear & Greed Index Fall to 20/100 Likely to Test Investor Sentiment

Key Insights:

• On Thursday, bitcoin (BTC) rose by 5.09% to end the session at $19,413.
• Dip buyers jumped as investors looked beyond the Fed and the continued fallout, which left the NASDAQ 100 in negative territory on the day.
• However, the Bitcoin Fear & Greed Index slipped from 22/100 to 20/100, weighed by concerns over the economic outlook and the Fed.

On Thursday, bitcoin (BTC) rallied by 5.09%. Reversing a 2.19% decline from Wednesday, BTC ended the day at $19,413. While closing at $19,000 for the first time in three sessions, BTC fell short of $20,000 for the fourth consecutive session.

A mixed start to the day saw BTC fall to an early low of $18,377 before making a move. Steering clear of the First Major Support Level (S1) at $17,795, BTC rallied to a late high of $19,524. However, falling short of the First Major Resistance Level (R1) at $19,566, BTC slipped back to sub-$19,500.

Investor sentiment towards the SEC v Ripple case (XRP) and the Cardano (ADA) mainnet hard fork likely contributed to the upside. Dip buyers supported a breakout session, with BTC and the broader crypto market decoupling from the NASDAQ 100.

On Thursday, the NASDAQ 100 fell by 1.37%. This morning, the NASDAQ 100 Mini was up 23.5 points, while BTC sits in the red.

Bitcoin Fear & Greed Index Falls to 20 Despite BTC Return to $19,500

Today, the Fear & Greed Index slipped from 22/100 to 20/100. The Index continued to reflect investor sentiment toward the Fed monetary policy decision and FOMC projections that were bearish for riskier assets.

However, the Index avoided sub-20, supported by a BTC return to $19,500. The Index would need to reverse the recent downward trend to give BTC a run at $25,000.

In recent weeks, avoiding sub-20/100 has been the key. The bears will be eying a fall to sub-20/100 to signal a BTC slide to sub-$18,000. By contrast, the bulls will look for an Index return to 40/100 to support a move toward $25,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.21% to $19,372. A mixed start to the day saw BTC rise to a high of $19,468 before falling to a low of $19,356.

Technical Indicators

BTC needs to avoid the $19,105 pivot to target the First Major Resistance Level (R1) at $19,832. While BTC decoupled from the NASDAQ 100 on Thursday, US economic indicators could influence later today. Private sector PMIs for September could reignite recession fears.

In the case of an extended rally, BTC should test the Second Major Resistance Level (R2) at $20,252. The Third Major Resistance Level (R3) sits at $21,399.

A fall through the pivot would bring the First Major Support Level (S1) at $18,685 into play. Barring an extended sell-off, BTC should avoid sub-$18,000 and the Second Major Support Level (S2) at $17,958.

The Third Major Support Level (S3) sits at $16,811.

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 $19,509. 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 price signals.

A move through the 50-day EMA ($19,509) and R1 ($19,832) would give the bulls a run at the 100-day EMA ($19,887) and $20,000. The 200-day EMA sits at $20,448. However, failure to move through the 50-day EMA would leave BTC under pressure.

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 a fall through the September low of $18,210 would support a move back towards $25,000.

However, the trend has turned bearish following Wednesday’s new September low. A fall through the September low of $18,210 would bring sub-$18,000 and the June low of $17,601 into play. A Fear & Greed Index return to 30/100 should support a shift in sentiment.