BTC Fear & Greed Index Inches Higher Despite the NASDAQ Effect

Key Insights:

• On Friday, bitcoin (BTC) fell by 0.52% to end a range-bound session at $16,519.
• The NASDAQ Composite Index left BTC in the red for the session while BTC avoided a return to sub-$16,000.
• However, the Fear & Greed Index rose from 20/100 to 22/100, reflecting a modest improvement in investor sentiment over the holidays.

On Friday, bitcoin (BTC) fell by 0.52%. Following a 0.04% decline on Thursday, BTC ended the day at $16,519. Notably, BTC avoided sub-$16,000 for the third consecutive session.

A bearish start to the day saw BTC fall from an early high of $16,617 to a mid-morning low of $16,354. BTC fell through the First Major Support Level (S1) at $16,445. However, finding mid-morning support, BTC revisited $16,600 before falling back into the red.

It was another quiet session, with the US Thanksgiving Holidays sending trading volumes lower. A lack of news updates from the ongoing FTX saga left the NASDAQ Composite Index to influence, which fell by 0.52% in a shortened holiday session.

Despite the quiet session, the range-bound session suggested a further fall in FTX contagion risk, cushioning a BTC return to sub-$16,000. News of sizeable asset discoveries and the Binance recovery fund softened the blow from the FTX collapse.

On Thursday, Binance CEO CZ pledged $1 billion for FTX-impacted crypto firms. In an interview with Bloomberg TV, CZ also said that Binance would make another bid for Voyager Digital.

Today, investors will need to monitor the crypto news wires for updates on FTX and other crypto events that could influence investor sentiment.

The Fear & Greed Index Inches Higher as BTC Moves Sideways

Today, the BTC Fear & Greed Index increased from 20/100 to 22/100. Another range-bound BTC session supported a pickup in investor sentiment. BTC avoided sub-$16,000 for a third consecutive session, raising hopes of a bottoming out.

Market angst over the collapse of FTX has eased, leaving the crypto market in a tight range. However, contagion risk and regulatory uncertainty continue to peg BTC back from a return to $17,000 and an Index move into the Fear zone.

Until there is clarity on the total impact of the FTX collapse on the crypto market, we expect the Index to hover within the Extreme Fear zone.

While sitting at 20/100, avoiding sub-20/100 remains the key for the 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 flat at $16,519. A range-bound start to the day saw BTC rise to an early high of $16,527 before easing back.

Technical Indicators

BTC needs to avoid the $16,497 pivot to target the Friday high of $16,617 and the First Major Resistance Level (R1) at $16,639. A return to $16,600 would signal a bullish session. However, BTC would need friendly FTX-linked news updates to support a breakout session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $16,760 and resistance at $17,000. The Third Major Resistance Level (R3) sits at $17,023.

A fall through the pivot would bring the First Major Support Level (S1) at $16,376 into play. Barring an extended sell-off, BTC should avoid sub-$16,000. The Second Major Support Level (S2) at $16,234 should limit the downside. However, negative FTX-related news could send BTC to sub-$15,000.

The Third Major Support Level (S3) sits at $15,971.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat at the 50-day EMA, currently at $16,544. The 50-day EMA slipped back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A breakout from the 50-day EMA ($16,544) would support a move through R1 ($16,639) to target R2 ($16,760) and $17,000. However, a failure to break out from the 50-day EMA ($16,544) would leave S1 ($16,376) in play.