Bitcoin (BTC) Fear & Greed Index Rises Despite US Inflation Spike

Key Insights:

• Bitcoin (BTC) rallied by 4.77% on Wednesday to end a five-day losing streak.
• The breakout session came despite a pickup in US inflationary pressure that left the NASDAQ 100 in the red for the session.
• The Bitcoin Fear & Greed Index increased from 15/100 to 18/100, with investors now looking ahead to US retail sales figures due on Friday.

On Tuesday, bitcoin (BTC) rallied by 4.77%. Reversing a 3.18% loss from Tuesday, bitcoin ended the day at $20,231. Bitcoin ended a five-day losing streak.

A choppy session saw BTC slide to a low of $18,919 in response to US inflation numbers before making a move.

BTC fell through the First Major Support Level at $19,342 before striking a high of $20,275.

BTC broke through the First Major Resistance Level at $19,821 to come within range of the Second Major Resistance Level at $20,331 before easing back.

Market reaction to June inflation figures for the US tested investor appetite for riskier assets.

However, with Fed concerns over the impact of rate hikes on the US economy, investors jumped back in ahead of US retail sales figures due tomorrow.

BTC tracked the NASDAQ 100 through the US session before a post-US market close breakout.

On Wednesday, the NASDAQ 100 slipped by 0.15%.

At the time of writing, the NASDAQ 100 Mini was down 65.25 points.

Bitcoin Fear & Greed Index Rise back to 18/100

This morning, the Fear & Greed Index increased from 15/100 to 18/100. The upside was modest relative to the bitcoin rally, with investor caution pegging the Index back from a return to 20/100.

For the bulls, a move back towards the July high of 24/100 was positive, though headwinds remain.

A likely shift in the regulatory landscape, the threat of a US recession, and uncertainty over Fed monetary policy continue to test investor sentiment.

The bulls will be looking for a return to the “Fear” zone to signal a possible end to the crypto winter.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.14% to $20,259.

A range-bound start to the day saw BTC rise to an early high of $20,380 before falling to a low of $20,158.

Technical Indicators

BTC needs to avoid the $19,805 pivot to target the First Major Resistance Level (R1) at $20,695 and test resistance at $21,000.

BTC would need a bullish session to support a breakout from $20,500.

An extended rally would test the Second Major Resistance Level (R2) at $21,165 and resistance at $21,500. The Third Major Resistance Level (R3) sits at $22,520.

A fall through the pivot would bring the First Major Support Level (S1) at $19,344 into play.

Barring an extended sell-off, BTC should avoid sub-$19,000 and the Second Major Support Level (S2) at $18,453.

The Third Major Support Level (S3) sits at $17,096.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $20,303.

The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA closing in on the 200-day EMA; bitcoin price positive.

A further narrowing of the 50-day EMA to the 100-day EMA would bring $21,000 into play.

The bulls will be looking for a breakout from the 50-day EMA to target the 100-day EMA, currently at $20,610, and resistance at $21,000.

On a trend analysis basis, bitcoin would need a move through a May 30 high of $32,503 to target the March 28 high of $48,192. Near-term, resistance at $25,000 will likely be the first test should the upward trend resume.

For the bears, the June 18 low of $17,601 would be the next target.