BTC Fear & Greed Index in Extreme Fear Ahead of US Nonfarm Payrolls

Key Insights:

• On Thursday, bitcoin (BTC) fell by 0.97% to end the day at sub-$20,000 for the first time in three sessions.
• US economic indicators took a back seat, with hawkish Fed chatter sending the NASDAQ 100 and BTC into the red.
• The Bitcoin Fear & Greed Index fell back into the Extreme Fear zone with a fall from 26/100 to 23/100.

On Thursday, bitcoin (BTC) fell by 0.97%. Following a 0.92% loss on Wednesday, BTC ended the day at $19,960. Notably, BTC ended the day at sub-$20,000 for the first time in three sessions.

A bullish start to the day saw BTC rise to an early high of $20,455. Coming up against the First Major Resistance Level (R1) at $20,429, BTC slid to a late low of $19,866. However, coming within range of the First Major Support Level (S1) at $19,816, BTC found support to end the day at $19,960.

BTC continued to the NASDAQ on Thursday, with both markets sensitive to FOMC member chatter.

FOMC member Charles Evans delivered the blow, talking of 125 basis points of rate hikes before the end of the year. However, the losses were modest, with mixed sentiment towards a Fed-fueled recession limiting the damage.

On Thursday, the NASDAQ 100 fell by 0.68%. This morning, the NASDAQ 100 Mini was up 1.75 points.

Later today, US nonfarm payrolls and Fed chatter will influence the markets. According to the FedWatch Tool, the probability of a 75-basis point rate hike sits at 75.9% compared to just 53.2% on September 29.

Bitcoin Fear & Greed Index Falls Back Into the Extreme Fear Zone

Today, the Fear & Greed Index fell from 26/100 to 23/100. Responding to a second consecutive bearish session and a BTC return to sub-$20,000, the Index fell back into the Extreme Fear zone.

On Wednesday, the Index had moved into the Fear zone for the first time since September 18 before succumbing to Fed chatter.

Uncertainty about the economic outlook and whether the Fed can avoid a hard landing has pegged BTC and Index back.

However, the Index continues to avoid a return to sub-20/100, which has delivered BTC price support. 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 up 0.32% to $20,023. A bullish start to the day saw BTC rise from an early low of $19,950 to a high of $20,053.

Technical Indicators

BTC needs to move through the $20,094 pivot to target the First Major Resistance Level (R1) at $20,321 and the Thursday high of $20,455. A BTC move through $20,500 would signal a bullish session. However, US nonfarm payroll numbers will need to disappoint to support a breakout session.

In the case of an extended rally, BTC should test the Second Major Resistance Level (R2) at $20,683 and resistance at $21,000. The Third Major Resistance Level (R3) sits at $21,272.

Failure to move through the pivot would leave the First Major Support Level (S1) at $19,732 in play. Barring an extended sell-off, BTC should avoid sub-$19,500. The Second Major Support Level (S2) at $19,505 should limit the downside. However, impressive NFP numbers and hawkish Fed chatter would pressure BTC later today.

The Third Major Support Level (S3) sits at $18,916.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. This morning, bitcoin sat above the 200-day EMA, currently at $19,930.

After the 50-day EMA bullish cross through the 100-day EMA, the 50-day EMA pulled away from the 100-day EMA. The 100-day EMA narrowed to the 200-day EMA, delivering bullish price signals.

A BTC hold above the 200-day EMA ($19,930) would support a breakout from R1 ($20,321) to target R2 ($20,683). However, a fall through the 200-day EMA ($19,930) would give the bears a run at the 50-day EMA ($19,745) and S1 ($19,732).