BTC Fear & Greed Index Holds Steady Despite BTC Return to $16,000

Key Insights:

• On Tuesday, bitcoin (BTC) rose by 2.87%, ending a two-leasing streak.
• FTX Contagion risk abated as news updates on FTX assets filtered through to the crypto news wires.
• The Fear & Greed Index held steady at 22/100, with contagion risk ever-present despite Tuesday’s market gain.

On Tuesday, bitcoin (BTC) rose by 2.87%. Partially reversing a 3.15% slide from Monday, BTC ended the day at $16,217. Notably, BTC fell to sub-$16,000 for the second consecutive session.

A mixed start to the day saw BTC fall to a mid-morning low of $15,616. Steering clear of the First Major Support Level (S1) at $15,400, BTC rose to an early afternoon high of $16,294. BTC broke through the First Major Resistance Level (R1) at $16,218 before falling back to sub-$16,050. However, finding late support, BTC retested R1 before easing back.

FTX contagion risk continued to pressure investor appetite on Tuesday following the news of Genesis delivering a bankruptcy warning.

However, market conditions improved through the late morning. News of FTX holding $1.24 billion in cash reserves eased investor angst, with reports of Tron CEO Justin Sun and Ripple CEO Brad Garlinghouse targeting FTX assets a positive.

The cash reserves and asset sales should ease the losses of the top 50 creditors, which have $3.1 billion in exposures to FTX.

However, despite the news, FTX contagion remains an ever-present threat to the broader market. On Tuesday, the Judge presiding over the FTX bankruptcy proceedings agreed to the redaction of FTX client names. The redaction will leave investors grappling with uncertainty over possible FTX-linked platforms that may face liquidity issues.

The NASDAQ Composite Index also found support on Tuesday. Easing fears of a holiday bust on consumer spending drove demand for riskier assets. The NASDAQ rose by 1.36%. However, the NASDAQ mini was down 23.5 points this morning.

Later today, US Jobless claims, private sector PMIs, consumer sentiment, core durable goods, and the FOMC meeting minutes will draw interest. The stats and minutes will provide the crypto market with direction.

The Fear & Greed Index Holds Steady as FTX Contagion Risk Lingers

Today, the BTC Fear & Greed Index held steady at 22/100. The Index failed to respond to a BTC recovery of Monday’s loss and an all-important return to $16,000. FTX contagion risk remains a threat, which pegged the Index back from a move toward the Fear zone.

Avoiding sub-20/100 remains the key for the BTC bulls. A fall to sub-20/100 would see BTC face the risk of sub-$10,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.27% to $16,173. A mixed start to the day saw BTC fall to an early low of $16,168 before steadying.

Technical Indicators

BTC needs to avoid the $16,042 pivot to target the First Major Resistance Level (R1) at $16,469. A move through the Tuesday high of $16,294 would signal a bullish session. However, news updates have to be market-friendly to support a breakout session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $16,720 and resistance at $17,000.

The Third Major Resistance Level (R3) sits at $17,398.

A fall through the pivot would bring the First Major Support Level (S1) at $15,791 into play. Barring another extended sell-off, BTC should avoid sub-$15,000. The Second Major Support Level (S2) at $15,364 should limit the downside. However, negative FTX-related news could send BTC to sub-$15,000.

The Third Major Support Level (S3) sits at $14,686.

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 $16,527. The 50-day EMA eased back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A BTC move through R1 ($16,469) and the 50-day EMA ($16,527) would give the bulls a run at R2 ($16,720) and $17,000. However, failure to move through the 50-day EMA would leave S1 ($15,791) in play.