BTC Fear & Greed Index Signals Steady Session Despite Bearish Mood

Key Insights:

• On Wednesday, bitcoin (BTC) fell by 0.97% to end the day at $16,558.
• Fed and recession jitters and geopolitics sent the NASDAQ Index and BTC into the red for a second consecutive session.
• The Fear & Greed Index held steady at 28/100 despite the BTC pullback, suggesting a steady Thursday session.

On Wednesday, bitcoin (BTC) fell by 0.97%. Following a 1.33% loss on Tuesday, BTC ended the day at $16,558. Notably, BTC failed to revisit $17,000 for the eighth consecutive session while falling to sub-$16,500 for the first time in eight sessions.

After a choppy morning, BTC rose to a mid-afternoon high of $16,797 before hitting reverse. Coming up short of the First Major Resistance Level (R1) at $16,932, BTC slid to a late low of $16,444. BTC fell through the First Major Support Level (S1) at $16,562, ending the day at $16,558.

Fed and Recession Fears and Geopolitics Sends the NASDAQ and BTC South

Russia’s ban on oil exports to countries with price caps and the ongoing easing of COVID-19 restrictions in China weighed on investor sentiment. Fears of a surge in demand for raw materials pushing commodity prices higher and forcing the Fed to hike interest rates for longer raise the prospects of a hard landing.

However, a surge in new COVID-19 cases across China was also bearish. The threat of new COVID-19 variants and the risk of another worldwide shutdown of borders added to the bearish mood. Governments are responding to the latest COVID-19 news by imposing restrictions on travelers from China.

The bearish sentiment weighed on riskier assets, with NASDAQ Index and S&P 500 seeing losses of 1.35% and 1.20%, respectively.

Today, the US economic calendar is on the light side. However, US jobless claims figures will draw interest. With the US unemployment rate at 3.7% and the Fed on an aggressive interest rate trajectory, better-than-expected numbers would support the Fed hawks.

Investors should also monitor the crypto news wires and any FOMC member chatter. Hawkish chatter would add to the bearish mood. Barring any material crypto events, BTC will likely track the NASDAQ Index through the afternoon session. The NASDAQ mini was up 18 points this morning, providing early support.

The Fear & Greed Index Hold at 28/100 Despite BTC Loss

Today, the BTC Fear & Greed Index held steady at 28/100 despite the bearish BTC session. While ending the day in negative territory, BTC continued to avoid sub-$16,000.

However, considering the crypto market headwinds, downward pressure will likely remain. Regulatory risk, Fed and recession fears, and geopolitics remain headwinds that could send BTC deeper into negative territory and the Index into the Extreme Fear zone.

Avoiding sub-20/100 remains the key near-term. The bulls will need to target the pre-FTX collapse November 6 high of 40/100 to support a BTC run at $20,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.16% to $16,584. A range-bound start to the day saw BTC fall to an early low of $16,555 before rising to a high of $16,591.

Technical Indicators

BTC needs to move through the $16,600 pivot to target the First Major Resistance Level (R1) at $16,755 and the Wednesday high of $16,797. A BTC return to $16,800 would signal a bullish session. However, the crypto news wires and the NASDAQ Index need to be crypto-friendly to support a breakout session.

In the event of an extended rally, BTC would test the Second Major Resistance Level (R2) at $16,953 and resistance at $17,000. The Third Major Resistance Level (R3) sits at $17,306.

Failure to move through the pivot would leave the First Major Support Level (S1) at $16,402 in play. Barring a crypto risk-off-fueled sell-off, BTC should avoid sub-$16,000. The Second Major Support Level (S2) at $16,247 should limit the downside. The Third Major Support Level (S3) sits at $15,894.

An adverse crypto market event would bring sub-$16,000 into play.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat below the 50-day EMA, currently at $16,803. The 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A move through R1 ($16,755) and the 50-day EMA ($16,803) would support a run at the 100-day EMA ($16,879) and R2 ($16,953). However, failure to move through the 50-day EMA ($16,803) would bring the Major Support Levels into view.