BTC Fear & Greed Index Slips Back into the Extreme Fear Zone

Key Insights:

• On Sunday, bitcoin (BTC) rose by 0.82% to extend the winning streak to five sessions.
• External market forces reversed losses from early in the session.
• The Bitcoin Fear & Greed Index slipped back into the Extreme Fear zone, with the Index falling from 26/100 to 25/100.

On Sunday, bitcoin (BTC) rose by 0.82%. Following a 1.32% on Saturday, BTC ended the week up 9.15% to $21,834.

A bearish morning saw BTC fall to an early low of $21,359. Avoiding the First Major Support Level (S1) at $21,263, BTC rose to a late high of $21,854. Coming up short of the First Major Resistance Level (R1) at $21,953 and $22,000, BTC eased back to end the day at $21,834.

Significantly, BTC extended the winning streak to five sessions and avoided sub-$21,000 for a second consecutive session.

It was a quiet Sunday on the crypto news wires. The lack of news likely left investors to consider the week ahead. US inflation and retail sales figures could deliver market turbulence Tuesday through Thursday.

A pickup in inflationary pressure and consumption could allow the Fed to consider a percentage point rate hike. We expect any talk of a percentage point rate hike to weigh on riskier assets.

However, with no direction from the crypto news wires, the NASDAQ 100 Mini delivered support in the final hour (UTC).

Bitcoin Fear & Greed Index Slips Back into the Extreme Fear Zone

Today, the Fear & Greed Index slipped from 26/100 to 25/100. The second fall in a row came despite bitcoin enjoying a fifth consecutive rise and a hold onto the $21,000 handle. Investor uncertainty ahead of this week’s US economic indicators likely contributed to the decline.

Going into the week, the Index will need to hold above 20/100 to support the current BTC upswing. The bulls will look for an Index return to 40/100 to signal a BTC run at $25,000.

However, 20/100 remains the line in the sand, with an Index decline to sub-20 likely to bring sub-$18,000 into play.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 1.07% to $22,068. A mixed start to the week saw BTC fall to an early low of $21,572 before rising to a high of $22,107. BTC broke through the First Major Resistance Level (R1) at $22,006.

Technical Indicators

BTC needs to hold above R1 and the $21,682 pivot to target the Second Major Resistance Level (R2) at $22,177 and $22,500. A bullish morning session would support a breakout from the morning high of $22,107.

Another extended crypto rally would see BTC test the Third Major Resistance Level (R3) at $22,672 and resistance at $23,000. However, the NASDAQ 100 Mini and the US session would need to deliver support.

Late in the session, US consumer inflation expectation figures will draw interest ahead of Tuesday’s official consumer inflation numbers.

A fall through R1 and the pivot would bring the First Major Support Level (S1) at $21,511 into play. Barring an extended sell-off, BTC should avoid sub-$21,000. The Second Major Support Level (S2) at $21,187 should limit the downside.

The Third Major Support Level (S3) sits at $20,692.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. This morning, bitcoin sat above the 200-day EMA, currently at $21,086.

The 50-day EMA crossed through the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish price signals.

The bullish cross of the 50-day EMA through the 100-day EMA should give the bulls a run at $23,000. However, BTC has to avoid the 200-day EMA to deliver another bullish session. A fall through S1 ($21,511) and S2 ($21,187) would bring the 200-day EMA ($21,086) into view.

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 EMAs and the September low of $18,549 would support a move back towards $25,000.

The current trends are BTC price positive, with BTC striking new highs in the latest upswing. However, a BTC fall through the September low of $18,549 would bring sub-$18,000 and the June low of $17,601 into play.