BTC Fear & Greed Index Rises Despite BTC Fall to Sub-$19,000

Key Insights:

• It was a bearish Tuesday, with Bitcoin (BTC) ending the day at sub-$19,000 for the first time since June 18.
• Risk aversion swept through the crypto market for a second consecutive session, with US economic indicators adding to the downside.
• The Bitcoin Fear & Greed Index rose from 22/100 to 24/100, though the signal remains bearish.

On Tuesday, bitcoin (BTC) slid by 5.03%. Following a 1.07% decline on Monday, BTC ended the day at $18,794. The sub-$19,000 finish was the first since June 18, with the BTC fall through the August low of $19,540 and the July low of $18,768 being significant for the BTC bears.

A bullish start to the day saw BTC rise to an early high of $20,193 before hitting reverse. BTC broke through the First Major Resistance Level (R1) at $20,021 before sliding to a late low of $18,675. BTC fell through the day’s Major Support Levels to end at sub-$18,800.

There were no crypto market events to send BTC and the broader market into a tailspin. However, the return of US investors from the Labor Day long weekend sent BTC and the crypto market deep into negative territory.

US economic indicators added to the market angst, with Fed fear continuing to impact the crypto market. In August, the ISM Non-Manufacturing PMI increased from 56.7 to 56.9. Economists forecast a fall to 55.1. A return to hiring across the services sector and a rise in new orders supported a more hawkish Fed rate hike later this month.

While the NASDAQ 100 suffered at the hands of Tuesday’s stats, the decline was modest relative to BTC and the broader market. Investor sentiment towards the US economic outlook, inflation, and outlook towards interest rates likely contributed to Bitcoin’s demise.

Investors may see crypto as the asset class to drop in a negative economic outlook environment. On Tuesday, the NASDAQ 100 fell by a modest 0.74%. However, the NASDAQ 100 mini is down 83.5 points this morning.

Bitcoin Fear & Greed Index Avoids sub-20/100 Despite BTC Sell-Off

Today, the Fear & Greed Index increased from 22/100 to 24/100. The upside came despite the BTC fall to sub-$19,000 for the first time since June 18. However, as previously mentioned, the Index remains within the Extreme Fear zone, leaving the current year low of $17,605 in play.

20/100 remains a key level, with an Index decline to sub-20 likely to bring sub-$18,000 into play. For the bulls, the Index needs a move through 40/100 to support a BTC return to $25,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.05% to $18,804. A choppy start to the day saw BTC rise to an early high of $18,863 before falling to a low of $18,670.

Technical Indicators

BTC needs to move through the $19,217 pivot to target the First Major Resistance Level (R1) at $19,760 and resistance at $20,000. The NASDAQ 100 and dovish FOMC member chatter would support a run at $20,000.

An extended crypto rally would see BTC test the Second Major Resistance Level (R2) at $20,725. The Third Major Resistance Level (R3) sits at $22,233.

Failure to move through the pivot would leave the First Major Support Level (S1) at $18,252 in play. Barring another extended sell-off, BTC should avoid sub-$18,000 and the Second Major Support Level (S2) at $17,709.

The Third Major Support Level (S3) sits at $16,201.

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 $19,909.

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.

Following the Tuesday fallback through the 50-day EMA, BTC will likely visit sub-$18,000 before any recovery. However, a BTC move through R1 ($19,760) and the 50-day EMA ($19,909) would ease selling pressure. The 200-day EMA sits at $21,247.

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 sub-$18,500 would support a move back towards the 50-day EMA to ease selling pressure.

For the bears, a fall through the September low of $18,760 would bring sub-$18,000 and the June 18 low of $17,601 into play.