BTC Fear & Greed Index Falls to 20/100 as BTC Fails to Revisit $20,000

Key Insights:

• On Friday, bitcoin (BTC) ended a three-day losing streak with a 0.61% gain to end the day at $19,175.
• FOMC member chatter and comments from US Treasury Secretary Janet Yellen delivered BTC support.
• The Bitcoin Fear & Greed Index fell from 23/100 to 20/100 despite the bullish session, reflecting investor caution.

On Friday, bitcoin (BTC) rose by 0.61%. Reversing a 0.39% loss from Thursday, BTC ended the day at $19,175. Notably, BTC fell short of $20,000 for the fourteenth consecutive session while falling to sub-$19,000 for the second time in six sessions.

After a range-bound morning, BTC slid to a mid-day low of $18,673. BTC fell through the First Major Support Level (S1) at $18,854. Steering clear of the Second Major Support Level (S2) at $18,649, BTC rallied to a late high of $19,260. However, falling short of the First Major Resistance Level (R1) at $19,309, BTC eased back to end the day at sub-$19,200.

US Treasury Secretary Janet Yellen and FOMC member chatter delivered a bullish afternoon session. Yellen eased fears of embedded inflation, with reports of Fed members considering taking their foot off the gas, adding support to riskier assets.

The less hawkish chatter saw bets of 75-basis point Fed rate hikes in November and December fall back, though not enough to suggest a move away from a 75-basis point hike in November.

According to the FedWatch Tool, the probability of a 75-basis point hike in November stood at 88.0%, down from 98.4% on Thursday. For December, Fed chatter had a more significant impact, with the probability of a 75-basis point hike falling from 75.4% to 50.6%.

In response to a shift in sentiment towards the Fed, the NASDAQ 100 rallied by 2.31%.

The Fear & Greed Index Hits Reverse but Avoids Sub-20/100

Today, the Fear & Greed Index fell from 23/100 20/100. After having defied gravity for three sessions, the Index decline came despite a relatively bullish BTC session. A choppy Friday session that led BTC to a day low of $18,673 likely contributed to the Index decline.

For the bulls, the Index will need to continue avoiding sub-20/100 to support a shift in sentiment. However, a fall to sub-20/100 would signal a BTC slide to sub-$18,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.06% to $19,163. A mixed start to the day saw BTC rise to an early high of $19,184 before falling to a low of $19,162.

Technical Indicators

BTC needs to avoid the $19,036 pivot to target the First Major Resistance Level (R1) at $19,399. Following less hawkish FOMC member chatter and today’s FedWatch Tool numbers, a BTC move through the Friday high of $19,260 would signal a bullish session.

In the case of an extended rally, the Second Major Resistance Level (R2) at $19,623 and $20,000 would likely come into play. The Third Major Resistance Level (R3) sits at $20,210.

A fall through the pivot would bring the First Major Support Level (S1) at $18,812 into play. Barring an extended sell-off, BTC should avoid sub-$18,500 and the Second Major Support Level (S2) at $18,449.

The Third Major Support Level (S3) sits at $17,862.

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 $19,242.

The 50-day EMA eased back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA to deliver bearish signals.

BTC needs to move through the 50-day EMA ($19,252) to give the bulls a run at the 100-day EMA ($19,322) and R1 ($19,399). The 200-day EMA sits at $19,541. However, failure to move through the 50-day EMA ($19,242) would leave S1 ($18,812) in play.

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 toward $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.

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Working on Bitcoin Fear & Greed Index – Review of price action from the day prior and key drivers – link to NASDAQ – Fear & Greed Index trends – BTC price action for the day ahead – This includes resistance pivot and support, EMAs, and Trend analysis.