BTC Fear & Greed Indicator Returns to Fear Zone as BTC Rises to $20,000

the main ideas:

  • On Saturday, Bitcoin (BTC) rose 1.57%, posting its ninth gain in eleven sessions.
  • Recession fears eased, with the Fed’s fears also fading despite the Fed’s upcoming monetary policy decision on Wednesday.
  • Bitcoin Fear & Greed rose from 22/100 to 27/100, boosted by BTC’s return to $20,000.

On Saturday, Bitcoin (BTC) rose 1.57%. After posting a 0.50% gain on Friday, BTC ended the day at $20,125.

After a mixed morning, Bitcoin dropped to a mid-day low of $19,757. Avoiding the first major support (S1) level at $19,475, BTC broke the first major resistance (R1) level at $20,022 to reach the late afternoon high at $20,212. However, when BTC failed to reach the second major resistance level at $20,232, BTC fell back below $20,200.

Cryptocurrency investors ignored recession fears that resurfaced after the FedEx (FDX) warning. Sentiment against the Federal Reserve’s monetary policy decision on Wednesday provided BTC support.

On Saturday, the split between a 75 basis point and percentage point rate hike was 82% to 18% in favor of a 75 basis point increase. Before Thursday’s retail sales, Philadelphia federal numbers and FedEx warning, the split was 75% to 25% in favor of a 75% rate hike.

While the Fed’s concerns eased over the weekend, we expect the Fed’s concerns to re-emerge ahead of Wednesday’s policy decision. The FedEx warning will also put more emphasis on the FMOC’s economic outlook. A hawkish view of interest rates and weaker economic growth expectations will test buyers’ appetite in the middle of the week.

Nasdaq – BTCUSD 180,922 Daily Chart

Bitcoin Fear & Greed Index Moves Out of Extreme Fear Zone

The Fear and Greed Index rose today from 22/100 to 27/100. In response to the improved cryptocurrency market conditions and the return of Bitcoin to $20,000, notably, the index has moved out of the area of ‚Äč‚Äčintense fear, indicating an upcoming bullish session.

Avoiding below 20/100 was key, although the bears would see a dip below 20/100 to signal a BTC drop below $18,000. On the other hand, the bulls will look for an indicator back to 40/100 to support the move towards $25,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC is down 0.44% at $20,036 and the bearish start to the day has seen BTC drop from an early high of $20,125 to a low of $19,966.

BTCUSD 180,922 Daily Chart

Technical Indicators

BTC needs to avoid the $20,031 pivot to target the first major resistance level (R1) at $20,306. Without the influence of the NASDAQ 100 or the speech of FOMC members, crypto news and technology will provide guidance.

In the event of an extended rally, BTC should test the second major resistance (R2) at $20,486, the $20,500 resistance, and the third major resistance (R3) at $20,941.

A fall through the pivot would place the first major support level (S1) at $19,851. Barring an extended sell-off, Bitcoin should avoid below $19,500, and the second major support level (S2) at $19,576 should act as a cap to the downside.

The third major support level (S3) is $19,121.

BTCUSD 180,922 hourly chart

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 $20,324.

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.

A move through the R1 ($20,306) and 50-day EMA ($20,324) would give the bulls a run at the 100-day EMA ($20,472) and R2 ($20,486). The 200-day EMA is at $20,889, however, a failure to break above the 50-day EMA will put Bitcoin under pressure.

BTCUSD 180,922 4-hour chart

trend analysis

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 trend turned to the downside after Tuesday and Thursday sales. A drop through the September low of $18,549 would put $18,000 below the low and the June low of $17,601 into play. A return to the Fear & Greed Index to 30/100 can support a change in sentiment.

BTCUSD 180922 Daily Chart Trends

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