BTC Fear & Greed Index Rises Despite BTC Visit to sub-$20,000

Key Insights:

• On Wednesday, bitcoin (BTC) rose for the seventh session in eight.
• Softer wholesale inflation figures, a bullish NASDAQ 100 session, and sentiment towards the Merge and the Vasil hard fork supported the broader crypto market.
• The Bitcoin Fear & Greed Index rose from 27/100 to 28/100, with a bullish BTC session supporting the modest increase.

On Wednesday, bitcoin (BTC) rose by 0.29%. Partially reversing Tuesday’s 9.91% tumble, BTC ended the day at $20,234.

A bullish start to the day saw BTC rise to an early high of $20,536. Coming short of the First Major Resistance Level (R1) at $22,018, BTC slid to a late afternoon low of $19,624. However, avoiding the First Major Support Level (S1) at $19,107, BTC found late support to wrap up the day at $20,234.

The US wholesale inflation report for August provided modest support. Softer numbers eased fears of a further pickup in consumer price inflation. Significantly, the stats lowered the bets of a one percentage point Fed rate hike.

On Wednesday, the NASDAQ 100 rose by 0.74%, the upside providing some crypto market comfort.

US economic indicators are back in focus today. Retail sales, jobless claims, and Philly Fed Manufacturing numbers will draw interest. With the FOMC in its pre-meeting blackout period, the markets remain data-dependent. Dire consumption figures and a jump in jobless claims could raise bets of a 50-basis point rate hike.

Bitcoin Fear & Greed Index Rises on BTC Recovery from Sub-$20,000

Today, the Fear & Greed Index rose from 27/100 to 28/100. While the increase was modest, the Index avoided the Extreme Fear zone, reflecting investor resilience.

Easing bets of a percentage point Fed rate hike and a bullish NASDAQ 100 session supported BTC and the Index.

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

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.38% to $20,158. A choppy start to the day saw BTC rise to an early high of $20,278 before falling to a low of $19,968.

Technical Indicators

BTC needs to avoid another fall through the $20,131 pivot to target the First Major Resistance Level (R1) at $20,639. Crypto-friendly US economic indicators would support a breakout from the Wednesday high of $20,536.

In the case of an extended rally, BTC should test the Second Major Resistance Level (R2) at $21,043. The Third Major Resistance Level (R3) sits at $21,955. While US stats will influence, the Ethereum Merge has to go smoothly to support a bullish session.

A fall through the pivot would bring the First Major Support Level (S1) at $19,727 into play. Barring an extended sell-off, BTC should avoid sub-$19,000. The Second Major Support Level (S2) at $19,219 should limit the downside.

The Third Major Support Level (S3) sits at $18,307.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 100-day EMA, currently at $20,730.

The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish price signals. A bearish cross of the 50-day EMA through the 100-day EMA would support a slide to sub-$19,000.

However, a BTC move through the 100-day EMA and the 50-day ($20,790) EMA would give the bulls a run at R1 ($20,639). The 200-day EMA sits at $21,090.

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 $18,549 would support a move back towards $25,000.

However, the current trend has turned bearish after Tuesday’s sell-off. A BTC fall through the September low of $18,549 would bring sub-$18,000 and the June low of $17,601 into play.