the main ideas:
- On Monday, Bitcoin (BTC) dropped to a new low in September ahead of the US session recovery to end the day 0.65% higher.
- Fed and recession fears resurfaced ahead of Wednesday’s policy decision. However, the Nasdaq 100 bounce supported Bitcoin’s return to $19,500.
- Bitcoin Fear & Greed Index rose from 21/100 to 23/100, boosted by BTC’s return to $19,500.
On Monday, Bitcoin (BTC) rose 0.65%. After partially reversing the 3.51% drop from Sunday, BTC ended the day at $19,545. This was the fourth time since July 3 that BTC failed to visit $20,000.
A bearish start to the day saw Bitcoin slide into mid-morning and a new September low of $18256. BTC fell through the first major support level (S1) at $19,137 and the second major support level (S2) at $18,856.
However, BTC found support from the NASDAQ, and rose to a late high at $19,694 before easing back below $19,600. Despite the rebound, Bitcoin reached a level below the first major resistance level (R1) at $19,912.
Early in the session, Fed and recession fears sent BTC to a new low in September. However, rising appetite for riskier assets has supported this recovery. Markets are still torn as to whether the Fed will take advantage of labor market conditions to raise rates at a faster pace.
On Monday, the probability of 75 basis points was 81.0% versus 19.0% for a percentage point increase. The latest split was less tight than it was on Sunday when the percentage rise chance was 21%.
With the Fed’s policy decision on Wednesday and expectations being the main event, the cryptocurrency market is likely to continue tracking the Nasdaq 100 Index. There are no US economic indicators to change sentiment today.
On Monday, the Nasdaq 100 is up 0.76%, with the Nasdaq 100 Mini up 36.5 points this morning.
Bitcoin Fear and Greed Index Reflects Increased Market Uncertainty
The Fear and Greed Index rose today from 21/100 to 23/100. The index responded to the bullish cryptocurrency market session with bitcoin’s return to $19,500. However, investor uncertainty about the Federal Reserve and the economic outlook has left the index in a region of intense fear.
For investors who take the index as a guide, the lack of direction reflects the current uncertainty surrounding the Fed’s policy decision and economic outlook.
In recent weeks, avoiding sub-20/100 has been key. The bears will be looking to drop below 20/100 to indicate a BTC slide below $18,000. Conversely, the bulls will be looking for the index to return to 40/100 to support a move towards $25,000.
Bitcoin (BTC) Price Action
At the time of writing, BTC is down 0.71% to $19,406. A mixed start to the day saw BTC climb to an early high of $1,635 before dropping to $19,376.
BTC needs to avoid the $19,165 pivot to target the first major resistance level (R1) at $20,074. As investors look forward to Wednesday’s monetary policy decision, the Nasdaq 100 will remain influential. There are no US economic indicators to consider today.
In the event of an extended rally, BTC should test the second major resistance (R2) at $2,603 and the $21,000 resistance. The third major resistance level (R3) is located at $22,041.
A fall through the pivot would trigger the first major support level (S1) at $18,636 and the September low at $18,256. Barring another extended sell off, BTC should avoid the second major support level (S2) at $17,727 and the June/2022 low at $1,701.
The third major support level (S3) is located at $16,289.
Looking at the exponential moving averages and the 4-hour candlestick chart (below), it was a bearish signal. This morning, Bitcoin sat below the 50-day moving average, currently at $19,953.
The 50 day moving average has pulled back from the 100 day moving average, with the 100 day moving average pulling back from the 200 day moving average, giving bearish price signals.
A move through the 50-day EMA ($19.953) and R1 ($20,074) will trigger the bulls at the 100-day MA ($20,236) and R2 ($20,063). The 200-day EMA is at $20.718. However, a failure to move across the 50 day EMA would leave Bitcoin under pressure.
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 $18256 would support a return towards $25,000.
However, the trend has turned bearish after a new low on Monday in September. A drop through the September low of $18256 would trigger a run of $18,000 below the low and the June low of $17,601. The return of the Fear and Greed Index to 30/100 should support the shift in sentiment, which may depend on the Fed.