BTC Fear & Greed Index Exits Extreme Fear Despite the NASDAQ Loss

Key Insights:

• On Tuesday, bitcoin (BTC) gained 0.70%. Partially reversing a 0.89% loss from Monday, BTC ended the day at $17,000 for the fourth time in seven sessions.
• A quiet US economic calendar sank the NASDAQ and sent BTC into the red before a final-hour (UTC) rebound.
• The Fear & Greed Index brushed aside the NASDAQ loss, jumping from 25/100 to 29/100, importantly exiting the Extreme Fear zone.

On Tuesday, bitcoin (BTC) rose by 0.70%. Partially reversing a 0.89% loss from Monday, BTC ended the day at $17,094. The bullish session saw BTC end the day at $17,000 for the fourth time in seven sessions.

A mixed morning saw BTC rise to an early morning high of $17,109 before hitting reverse. Coming up short of the First Major Resistance Level (R1) at $17,312, BTC fell to a late morning low of $16,908. However, steering clear of the First Major Support Level (S1) at $16,762, BTC found late support to revisit the day high of $17,109 before easing back.

Fed Fear Stemming from Positive US Stats Tested Investor Resilience

Economic data from the US was on the lighter side on Tuesday. Trade data and the Redbook had a muted impact on BTC and the broader market. Following Friday’s US Jobs Report and Monday’s ISM Non-Manufacturing PMI survey, uncertainty over a December Fed pivot resurfaced.

Last week, the Core PCE Price Index showed softer inflation, supporting less hawkish Fed Chair Powell chatter. While the ISM Manufacturing PMI numbers supported a Fed pivot, the ISM Non-Manufacturing PMI and Jobs Report supported another 75-basis point rate hike.

A lack of Fed chatter further exasperates the uncertainty, with the Fed in its blackout period since Sunday. On Tuesday, the NASDAQ Composite Index fell by 2.00%, reflecting the increased Fed fear. However, crypto investors appear to be holding onto Fed Chair Powell’s talk about slowing the pace of rate hikes.

Today, the US economic calendar is light, with nonfarm productivity and unit labor costs due. The lack of stats could see greater interest in today’s labor cost figures following last week’s jobs report.

This morning, the NASDAQ mini was up 12.25 points.

The Fear & Greed Index Exits the Extreme Fear Zone on a Bullish BTC

Today, the BTC Fear & Greed Index jumped from 25/100 to 29/100. Significantly, the Index exited the Extreme Fear zone. Decoupling from the NASDAQ Composite Index supported the Index move, with the hope of the US averting an economic recession likely contributing to the upswing.

However, the latest set of US economic indicators has raised the prospects of another hawkish Fed policy move, which will continue to test investor sentiment.

Next week’s November US CPI report will give investors more data points to second guess the Fed’s next move. The long wait until next Tuesday’s US CPI report will likely cap BTC and the broader market from a sustainable breakout from current levels.

However, an Index upward trend could give sidelined investors an incentive to reenter the market.

Near-term, avoiding sub-20/100 remains the key near-term. The bulls will need to target the pre-FTX collapse November 6 high of 40/100 to support a BTC run at $20,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.10% to $17,077. A mixed start to the day saw BTC fall to an early low of $17,064 before rising to a high of $17,156.

Technical Indicators

BTC needs to avoid the $17,037 pivot to retarget the First Major Resistance Level (R1) at $17,166. A move through the morning high of $17,156 would signal a bullish session. However, the crypto news wires should be market-friendly to support a breakout session.

Barring an extended rally, the Second Major Resistance Level (R2) at $17,238 would likely cap the upside. The Third Major Resistance Level (R3) sits at $17,439.

A fall through the pivot would bring the First Major Support Level (S1) at $16,965 into play. Barring an extended sell-off, BTC should avoid sub-$16,750. The Second Major Support Level (S2) at $16,836 should limit the downside. The Third Major Support Level (S3) sits at $16,635.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. This morning, bitcoin sat above the 50-day EMA, currently at $16,932. The 50-day EMA crossed through the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A move through R1 ($17,166) would support a run at R2 ($17,238) to bring R3 ($17,439) into play. However, a fall through S1 ($16,965) would give the bears a run at the 50-day EMA ($16,932) and the 100-day EMA ($16,931). A fall through the 50-day EMA would signal an extended sell-off.