BTC Fear & Greed Index Reflects Extreme Fear Ahead of US NFP Numbers

Key Insights:

• It was a bullish start to September for BTC on Thursday, with an 0.43% gain leaving BTC up 2.93% for the current week.
• Better-than-expected US economic indicators, amidst the hawkish Fed backdrop, sent BTC into the red before a late recovery.
• The Bitcoin Fear & Greed Index increased from 20/100 to 25/100 but remained within the Extreme Fear zone.

On Thursday, bitcoin (BTC) rose by 0.43%. Following a 1.18% gain from Wednesday, BTC ended the day at $20,144. BTC visited sub-$20,000 for a sixth consecutive session but steered clear of the July low of $18,962.

A bullish start to the Thursday session saw BTC rise to an early morning high of $20,212. Coming up against the First Major Resistance Level (R1) at $20,431, BTC slid to a late low of $19,581. BTC fell through the First Major Support Level (S1) at $19,748 before a late rebound to $20,144.

US economic indicators sent BTC into the red. In August, the ISM Manufacturing PMI held steady at 52.8. Economists forecast a decline to 52.0. Significantly, the employment sub-component jumped from 49.9 to 54.2.

Earlier in the session, initial jobless claims fell from 237k to 232k, with the 4-week average down from 245.5k to 241.5k. Thursday’s data set suggests that the Fed’s rate hikes and forward guidance had a muted impact on hiring, supportive of more front loading.

Today, the focus will shift to US nonfarm payrolls and wage growth figures for August. Being the official labor market numbers, another spike in hiring could force the Fed to take a more aggressive path to normalization.

The economic data from the US left the NASDAQ 100 down 0.26% on Thursday. This morning, the NASDAQ 100 Mini was up 6.25 points.

Bitcoin Fear & Greed Index Remains in the Extreme Fear Zone

Today, the Fear & Greed Index rose from 20/100 to 25/100. Economic indicators raised question marks over the Fed’s ability to slow the pace of hiring across the US.

The threat of more aggressive policy moves to slow hiring and bring inflation to target left the Index within the Extreme Fear Zone.

With the Index remaining within the Extreme Fear zone, the BTC current year low of $17,605 remains in play. US nonfarm payroll and wage growth figures will be two sets of numbers that investors will need to navigate today.

For the bulls, the Index needs a move through 40/100 to support a BTC return to $25,000. However, the fall deeper into the Extreme Fear zone suggests further BTC downside before any upswing.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.19% to $20,105. A bearish start to the day saw BTC fall from a start-of-the-day high of $21,142 to a low of $20,103.

Technical Indicators

BTC needs to avoid the $19,979 pivot to target the First Major Resistance Level (R1) at $20,377. BTC would need a pickup in market risk sentiment to support a breakout from the Thursday high of $20,212.

An extended crypto rally would see BTC test the Second Major Resistance Level (R2) at $20,610 and resistance at $21,000. The Third Major Resistance Level (R3) sits at $21,241. Today’s moves will be US data dependent, with the crypto market likely to take its cues from the NASDAQ 100.

A fall through the pivot would bring the First Major Support Level (S1) at $19,746 into play. Barring an extended sell-off, BTC should steer clear of sub-$19,000. The Second Major Support Level (S2) at $19,348 should limit the downside.

The Third Major Support Level (S3) sits at $18,717.

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 $20,443.

The 100-day EMA pulled back from the 200-day EMA, with the 50-day EMA falling back from the 200-day EMA, delivering bearish price signals.

A further pullback of the 50-day EMA from the 200-day EMA would bring the Major Support levels into play.

For the bulls, a BTC move through R1 ($20,377) and the 50-day EMA ($20,443) would bring R2 ($20,610) and the 100-day EMA ($21,099) into view. The 200-day EMA sits at $21,774.

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 the August low of $19,540 would support a move back towards the 50-day EMA to ease selling pressure.

For the bears, a fall through the August low would bring the July low of $18,768 and the June 18 low of $17,601 into play.