Bitcoin

Bitcoin (BTC) Fear & Greed Index Inches Up with the Fed in Focus

Key Insights:

  • Bitcoin (BTC) continued its downward trend from last week’s high of $24,276, with a 0.23% loss to end the day at $21,258.
  • Investor jitters over the Fed and US corporate earnings sent BTC to sub-$21,000 before a late rebound.
  • The Bitcoin Fear & Greed Index inched up from 26/100 to 28/100, supported by the BTC recovery from sub-$21,000.

On Tuesday, bitcoin (BTC) fell by 0.23%. Following a 5.66% slide from Monday, bitcoin ended the day at $21,258. Bitcoin fell for the sixth time in seven sessions, with bitcoin unable to shake off the news of Tesla offloading 75% of its BTC holdings.

Bearish through the morning, BTC slid from a high of $21,342 to an afternoon low of $20,733.

The extended sell-off saw BTC fall through the First Major Support Level at $20,829 before a return to $21,200 levels.

Economic data took a back seat, with US corporate earnings in the spotlight.

On Tuesday, Walmart Inc. (WMT) weighed on riskier assets with a grim earnings outlook for the current quarter and the fiscal year. Shares slid by 7.6% after the company said that higher prices for fuel and food would cause consumers to cut back on spending.

The doom and gloom outlook comes ahead of the Fed monetary policy decision. Uncertainty over Fed monetary policy and the US economic outlook has weighed on the crypto market.

On Tuesday, bitcoin tracked the NASDAQ into the red before a post-US market close rebound. The NASDAQ 100 slid by 1.87%.

NASDAQ correlation
BTC-NASDAQ 270722 5 Minute Chart

Bitcoin Fear & Greed Index Moves Away from the Extreme Fear Zone

Today, the Fear & Greed Index increased from 26/100 to 28/100. The Index marked the second rise in six sessions, supported by the BTC rebound from sub-$21,000.

BTC Fear & Greed Index
Fear & Greed 270722

Investor angst over the Fed, fears of a US recession, and market reaction to the Tesla offload remained market headwinds. US corporate earnings were also in the mix, with Walmart testing crypto support.

Despite the market angst, the Index continued to avoid the “Extreme Fear” zone sitting at sub-25/100.

However, it could be a different story later today, with the Fed monetary policy decision the event of the week. A 100-basis point rate hike would likely see the Index slide back into the Extreme Fear zone.

For the bulls, the next target is the “Neutral” zone, which starts at 46/100. The Index last sat in the “Neutral” zone on April 6, when bitcoin stood at $45,000 levels.

A move through last week’s high of 34/100 would signal improved investor sentiment and a possible bitcoin move towards $30,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.43% to $21,166.

BTC under early pressure
BTCUSD 270722 Daily Chart

Technical Indicators

BTC needs to avoid the $21,113 pivot to target the First Major Resistance Level (R1) at $21,490 and resistance at $21,500.

BTC would need a bullish session to support a breakout from the Tuesday high of $21,342.

An extended rally would test the Second Major Resistance Level (R2) at $21,723 and resistance at $22,000. The Third Major Resistance Level (R3) sits at $22,239.

A fall through the pivot would bring the First Major Support Level (S1) at $20,880 into play.

Barring an extended sell-off, BTC should avoid sub-$20,000. The Second Major Support Level (S2) at $20,503 should limit the downside.

The Third Major Support Level (S3) sits at $19,891.

BTC pivot the key early on
BTCUSD 270722 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 100-day EMA, currently at $21,755.

The 50-day narrowed to the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, both bearish BTC price signals.

A bearish cross of the 50-day EMA through the 100-day EMA would test support at $20,000. However, breaking through the 100-day EMA would support a breakout from R1 to test R2 and resistance at the 50-day EMA, currently at $21,956.

EMAs bearish
BTCUSD 270722 4 Hourly Chart

Looking at the trends, BTC would need a move through the July high of $24,276 and $25,000 to target the June high of $31,956. A bullish cross of the 100-day EMA through the 200-day EMA would support a run at the June high.

From $31,200, BTC should have a clear run at the May high of $40,004.

For the bears, the June 18 low of $17,601 would be the next target, with a fall through the July low of $18,768 likely to test investor resilience.

Trends
BTCUSD 270722 Trend Analysis