Bitcoin Fear & Greed Index Sends First Bullish Signal of the Year
After a choppy first half of the week, support from the NASDAQ 100 delivered Bitcoin (BTC) and the broader crypto market a much-needed boost late Thursday. Another Tech stock rally on Friday saw Bitcoin recover from $36,200 levels on Thursday to wrap up Friday at $41,000 levels.
On Friday, Bitcoin rallied by 11.41% to end the day at $41,590.
The broad-based crypto rally drove the total crypto market cap back to $1,850bn levels after having fallen to $1,489bn back on 24th January.
The Bitcoin Fear & Greed Index
Friday’s Bitcoin rally led to a jump in the Bitcoin Fear & Greed Index from 20/100 to 33/100. It was the first move out of the red zone since the Index had stood at 41/100 back on 28th December. Bitcoin’s selloff from November’s ATH $68,979 to sub-$33,000 levels had left the Index down at a January low 8/100. The move back through to the orange zone is a Bitcoin buying signal.
Corporate Earnings Delivers a NASDAQ Bounce Back
On Thursday, the NASDAQ 100 tumbled by 3.74% before a Friday rebound. Tracking the NASDAQ 100 through Thursday and Friday, Bitcoin had also been in the deep red on Thursday before an afterhours rally for the NASDAQ 100. Amazon.com earnings delivered the afterhours bounce back, which supported a Bitcoin rebound on Thursday and a breakout session on Friday.
Through much of the week, IMF concerns over the interconnectedness between cryptos and the U.S equity markets remained justified. There was no real evidence, however, of the crypto markets providing the U.S equity markets with direction.
Bitcoin Price Action
With the U.S markets closed for the weekend, technicals will likely be key for the day ahead.
At the time of writing, Bitcoin was down by 0.29% to $41,470. Avoiding a fall through the day’s $40,130 pivot would bring the first major resistance level at $43,199 into play. Bitcoin would need plenty of support, however, to breakdown resistance at $42,000. In the event of another extended breakout, the second major resistance level at $44,800 and resistance at $45,000 would likely be tested.
A fall through the $40,130 pivot would bring the first major resistance level at $38,520 into play. Barring an extended sell-off, Bitcoin should steer clear of sub-$40,000 levels, however.
Looking at the EMAs and daily candlesticks, the signal remains bearish. The 50-day EMA has pulled back from the 100-day and 200-day EMAs, with the 100-day EMA also pulling back from the 200-day EMA. Bitcoin remains below the 50-day EMA at $42,650 in spite of Friday’s breakout session.
Bitcoin will need to break through the 50-day EMA and move back through to $46,000 levels to support a near-term bearish trend reversal. At the time of writing, the 100-day EMA stood at the $46,100 level.