Bitcoin (BTC) Fear & Greed Index Inches Northwards on BTC Rally

Key Insights:

• Bitcoin (BTC) rose by 4.25% on Tuesday to consolidate the Monday breakout session.
• Risk appetite spilled over from the European and US equity markets, with improved investor sentiment toward crypto network news also supportive.
• The Bitcoin Fear & Greed Index increased from 30/100 to 31/100 to stay within the “Fear” zo ne.

On Tuesday, bitcoin (BTC) rose by 4.25%. Following a 7.95% rally on Monday, bitcoin ended the day at $23,400.

A choppy start to the day saw BTC fall to an early low of $21,588 before making a move.

Steering clear of the Major Support Levels, BTC rallied to a late high of $23,791.

BTC broke through the First Major Resistance Level at $23,211 to end the day at $23,400.

A further increase in the Bitcoin Fear & Greed Index to 31/100 reflected improving investor sentiment, evidenced in the BTC bounce back from sub-$22,000 to end the day in positive territory. Through the morning session, investors showed greater resilience to market volatility.

Sentiment towards the Ethereum (ETH) Merge and the Cardano (ADA) Vasil hard fork were market positives. The news of Walt Disney (DIS) selecting Polygon (MATIC) to join the 2022 Disney Accelerator was another positive for the broader crypto market.

From Capitol Hill, a sub-committee hearing on the “Oversight of the SEC’s Division of Enforcement” drew interest.

SEC Enforcement Director Gurbir Grewal delivered testimony, while lawmakers noted SEC Chair Gary Gensler’s absence. There are market hopes of the Commodity Futures Trading Commission (CFTC) taking on the task of regulating the digital asset space.

The Tuesday hearing and news of SEC Chair Gary Gensler looking to give the crypto market exemptions from some securities regulations were crypto positives.

Away from the crypto space, a broad-based equity market rally across Europe and the US also delivered support.

On Tuesday, the NASDAQ 100 rallied by 3.11%, with the DAX up 2.69%.

This morning, the NASDAQ 100 Mini was up by 58 points. Despite the early rise, the crypto market saw red early in the Wednesday session.

Bitcoin Fear & Greed Index Inches Higher

Today, the Fear & Greed Index increased from 30/100 to 31/100, consolidating the Tuesday return to the Fear zone. A bitcoin return to $23,000 reflected a further improvement in investor sentiment following the Index move out of the Extreme Fear zone.

The Index hit its highest level since 32/100 on April 11, when bitcoin stood at $39,599.

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.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 1.33% to $23,088.

A mixed start to the day saw BTC rise to an early high of $23,432 before falling to a low of $22,930.

Technical Indicators

BTC needs to avoid the $22,929 pivot to target the First Major Resistance Level (R1) at $24,267.

BTC would need a bullish session to support a breakout from the Tuesday high of $23,791.

Another extended rally would test the Second Major Resistance Level (R2) at $25,129. The Third Major Resistance Level (R3) sits at $27,332.

A fall through the pivot would bring the First Major Support Level (S1) at $22,063 into play.

Barring an extended sell-off, BTC should avoid sub-$22,000 and the Second Major Support Level (S2) at $20,724.

The Third Major Support Level (S3) sits at $18,520.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. This morning, bitcoin sat above the 200-day EMA, currently at $21,896.

The 50-day EMA pulled away from the 100-day EMA while narrowing to the 200-day EMA, both positive BTC indicators.

A bullish cross of the 50-day EMA through the 200-day EMA would bring $30,000 into play. However, BTC will need to avoid a fall through the 200-day EMA to avoid a reversal.

Looking at the trends, BTC would need a move through the new July high of $23,791 and $25,000 to target the June high of $31,956.

From $32,000, 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 last week’s low of $18,919 likely to test investor resilience.