BTC Fear & Greed Index Avoids Neutral Despite a Bearish BTC

Key Insights:

• It was a bearish Sunday, with BTC falling by 1.64% to end the day at $22,932.
• Fed Fear and regulatory risk continued to weigh on investor sentiment while easing contagion risk cushioned the downside.
• The Fear & Greed Index fell from 58/100 to 56/100 but remained in the Greed zone despite BTC returning to sub-$23,000.

On Sunday, bitcoin (BTC) fell by 1.64%. Following a 0.50% loss on Saturday, BTC ended the day at $22,932. BTC extended its losing streak to four sessions and ended the day at sub-$23,000 for the first time in five sessions.

A bullish start to the day saw BTC rise to a mid-morning high of $23,419. Coming up short of the First Major Resistance Level (R1) at $23,514, BTC fell to a late low of $22,777. BTC fell through the First Major Support Level (S1) at $23,182 and the Second Major Support Level (S2) at $23,049 to end the day at $22,932.

Investor Sentiment Toward Fed Policy Left BTC in the Red

It was a quiet Sunday session. There were no crypto events to weigh on investor appetite. The lack of news left Fed Fear to test buyer appetite throughout the session.

Friday’s US Jobs report and ISM Non-Manufacturing PMIs may provide the Fed with an unexpected option to deliver a hawkish March interest rate hike to tackle inflation further. Hopes of a Fed hold in March have vanished, with the FedWatch Tool showing a 97.4% probability of the Fed lifting interest rates to 5% next month. However, there are no bets on a 50-basis point interest rate hike.

FOMC member chatter could shift sentiment should inflationary pressures pick up in January. The January CPI report will be out on February 14.

Today, investors need to monitor FOMC member chatter, with hawkish commentary likely to weigh on investor sentiment. However, there are no US stats to consider. The crypto news wires will need consideration, with FTX, Genesis, Silvergate Bank, and regulatory chatter focal points.

 

The Fear & Greed Index Avoids Neutral Despite a Bearish BTC

Today, the BTC Fear & Greed Index fell from 58/100 to 56/100. It was a quiet day on the crypto news wires, leaving Fed Fear to weigh on investor sentiment.

Near-term, the Index must avoid the Neutral zone to support a BTC run at $25,000. A fall into the Fear zone would signal a near-term bullish trend reversal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.65% to $23,082. A bullish start to the day saw BTC rise from an early low of $22,925 to a high of $23,093.

Technical Indicators

BTC needs to avoid a fall through the $23,043 pivot to target the First Major Resistance Level (R1) at $23,308 and the Sunday high of $23,419. A return to $23,500 would signal a breakout session. However, the crypto news wires will need to be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $23,685 and resistance at $24,000. The Third Major Resistance Level sits at $24,327.

A fall through the pivot would bring the First Major Support Level (S1) at $22,666 into play. However, barring a risk-off-fueled crypto sell-off, BTC should avoid sub-$22,500 and the Second Major Support Level (S2) at $22,401. The Third Major Support Level (S3) sits at $21,759.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 100-day EMA, currently at $22,682. The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A move through the 50-day EMA ($23,218) would support a breakout from R1 ($23,308) to target R2 ($23,685) and $24,000. However, a fall through the 100-day EMA ($22,682) and S1 ($22,666) would bring S2 ($22,401) into view. A move through the 50-day EMA would send a bullish signal.