the main ideas:
- On Monday, Bitcoin (BTC) fell 1.54% to end the day below $21,000 for the second session.
- Bitcoin and the broader market have been separated from the Nasdaq Composite, as cryptocurrency investors look forward to this week’s US CPI report.
- Bitcoin Fear & Greed fell from 33/100 to 31/100, affected by the bearish BTC session.
On Monday, Bitcoin (BTC) fell 1.54%. After a 1.79% drop on Sunday, BTC ended the day at $20,609. Notably, BTC ended the day below $21,000 for the second consecutive session.
A mixed start to the day saw BTC surge to an early high of $21,083. When BTC failed to reach the first major resistance level (R1) at $21,240, BTC fell to a late low of $20,421. BTC declined through the first major support level (S1) at $20,762 and the second major support level (S2) at $20,592 before a partial recovery to $20,609.
The quiet US economic calendar has left Bitcoin in a sway. This week, US inflation, retail sales and consumer confidence will weigh on market sentiment towards the US economy and the Federal Reserve’s December meeting.
In contrast, the Nasdaq Composite Index rose 0.85% on Monday, with sentiment toward the medium term in the United States supported. Later today, it will be another quiet day in the US economic calendar, which will leave investors in limbo as the focus remains on the mid-term. The mini Nasdaq rose 15.5 points this morning.
Fear and Greed Index Drops to 31/100 in Another Bearish BTC Session
The Fear and Greed Index fell this morning from 33/100 to 31/100. Another bearish BTC session sent the index lower, although the decline was modest as BTC avoided below $20,000.
The lack of US economic indicators affected the Federal Reserve’s monetary policy plans for December. While market bets on the Fed pivot have risen, the FedWatch tool reflects the uncertainty over December’s move.
This morning, the probability of a 75 basis point rate hike in December is 43.2%, up from 38.5% on Friday.
The indicator will need to avoid sub-30/100 to support a return to 40 and a move to the neutral zone. However, a dip below 20/100 indicates BTC sliding below $18,000.
Bitcoin (BTC) Price Action
At the time of writing, BTC is down 0.17% at $20,573 and the range-bound start of the day saw BTC surge to an early high of $20,641 before dropping to $20,573.
BTC needs to break above the $20,704 pivot to target the first major resistance (R1) at $20,988 and Monday’s high at $21,083. A return to $20,750 indicates a possible breakout session.
In the event of an extended rally, the second major resistance level (R2) at $21,366 and resistance at $21,500 is likely to come into play. The third major resistance level (R3) is located at $22,028.
Failure to move through the pivot leaves the first major support level (S1) $20326 in play. Barring another extended sell off, BTC should avoid below $20,000, and the second major support level (S2) at $20,042 should act as a cap to the downside.
The third major support level (S3) is $19,380.
Looking at the exponential moving average and the 4-hour candlestick chart (below), it was a bullish signal. This morning, Bitcoin is above the 100-day moving average, currently at $20,466, the 50-day moving average has narrowed to the 100-day moving average, while the 100-day moving average has widened from The 200-day moving average is providing mixed signals.
A move through the 50-day exponential moving average ($20,751) would support a breakout from R1 ($20,988) to target R2 ($21,366) and $21,500. However, any decline in the 100-day EMA ($20,466) would bring the S1 ($20,326) and the 200-day ($20,173) into account.