the main ideas:
- On Thursday, Bitcoin (BTC) fell 2.57%, posting its second loss in nine sessions.
- The market reaction to the Ethereum merger and the NASDAQ 100 session was bearish.
- Bitcoin Fear & Greed fell from 28/100 to 20/100, as the bearish BTC session sent the index into the Extreme Fear area.
On Thursday, Bitcoin (BTC) was down 2.57%. After reversing its 0.29% gain from Wednesday, BTC ended the day at $19,714, which was the first to finish below $20,000 since September 8.
A mixed start to the day saw BTC surge to a mid-morning high at $19,508. Failing to reach the first major resistance level of $20,639, BTC fell through the first major support (S1) level of $19,727 to the low of $19,508 before briefly testing the resistance at $20,000. However, the bearish end of the day saw BTC pull back through the S1 to end the day at $19,714.
Market reaction to the Ethereum (ETH) consolidation has been bearish despite the reported smooth transition to the Proof of Stake (PoS) protocol. The bearish Nasdaq 100 session added to the market’s anxiety. On Thursday, the Nasdaq 100 was down 1.43%. Hopes that the Fed will be less hawkish have faded, as US economic indicators support an expected 75 basis point interest rate hike.
Bitcoin Fear & Greed Indicator Slides Into Extreme Fear Zone
Today’s Fear and Greed Index has dropped from 28/100 to 20/100. This slide came in response to Bitcoin’s return to below $20,000 as investors reacted to the consolidation and bearish Nasdaq 100 session.
While the index slipped back into the extreme fear zone, avoiding below 20/100 was key.
Bears will look for a dip below 20/100 to signal a BTC drop below $18,000. Conversely, BTC bulls will be looking for an index back to 40/100 to support BTC’s move towards $25,000.
Bitcoin (BTC) Price Action
At the time of writing, BTC is up 0.19% at $19,752 and a choppy start to the day saw BTC drop to an early low of $19,602 before climbing to a high of $19,767.
BTC needs to break above the $19,851 pivot to target the first major resistance (R1) at $20,193 and Thursday’s high at $20,330. Crypto-friendly US economic indicators will support a return to $20,000.
In the event of an extended rally, BTC should test the second major resistance level (R2) at $20,673. The third major resistance level (R3) is at $21,495. Market risk sentiment will need to improve ahead of the US session to support the breakout.
A failure to break the pivot will result in the first major support level (S1) being recorded at $1,9371. Barring an extended sell-off, BTC should avoid below $19,000, and the second major support level (S2) at $19029 should act as a cap to the downside.
The third major support level (S3) is $18207.
Looking at the exponential moving average and the 4-hour candlestick chart (below), it was a bearish signal. This morning, Bitcoin is below its 50-day moving average, currently at $20,592.
After a bearish crossover on Thursday, the 50-day moving average pulled back from the 100-day moving average, with the 100-day moving average pulling back from the 200-day moving average, providing bearish price signals.
BTC will need to break above the 50-day EMA ($20,592) and 100-day EMA ($20,633) to target R2 ($20,673). However, a failure to breach the R1 ($20193) and the 50 day EMA will leave the key support levels intact.
Looking at the trends, BTC will need to move through the August highs at $2,5203 and $25,500 to target the June highs at $31956. Avoiding a fall through the September low at $18,549 would support a return towards $25,000.
However, the current trend has turned bearish after losses on Tuesday and Thursday. BTC’s drop through the September low of $18,549 would put the below $18,000 and June low of $17,601 into play.