BTC Fear & Greed Index Slips Despite the Powell-Fueled NASDAQ Rally

Bob Mason
Published: Dec 1, 2022, 01:17 UTC

BTC returned to $17,000 on Wednesday, supported by less hawkish Fed Chair Powell chatter and a NASDAQ Index breakout. It could be a choppy day ahead.

BTC Fear & Greed Index - FX Empire

Key Insights:

  • On Wednesday, bitcoin (BTC) rallied 4.42% to end the day at $17,180.
  • Risk-on sentiment fueled by bets of China easing lockdown measures and a less hawkish Fed Chair delivered a NASDAQ and BTC breakout.
  • However, the Fear & Greed Index slipped from 29/100 to 27/100, reflecting caution ahead of today’s US economic indicators.

On Wednesday, bitcoin (BTC) rallied 4.42%. Following a 1.48% gain on Tuesday, BTC ended the day at $17,180. Notably, BTC wrapped up the day at $17,000 for the first time since early November.

A mixed start to the day saw BTC fall to an early low of $16,446. Steering clear of the First Major Support Level (S1) at $16,187, BTC surged to a late high of $17,275. BTC broke through the First Major Resistance Level (R1) at $16,631 and the Second Major Resistance Level (R2) at $16,810. The Third Major Resistance Level (R3) at $17,254 capped the upside.

Risk on sentiment from Tuesday spilled over to the Wednesday session. The investor bets of the Chinese government easing lockdown measures delivered early support, with falling FTX contagion risk also market positive.

However, late in the session, Fed Chair Powell delivered the session high, with the Fed Chair talking of a Fed pivot as soon as this month.

The less hawkish chatter also delivered a bullish session for the US equity markets. The NASDAQ Composite Index and the S&P 500 rallied by 4.41% and 3.09%, respectively.

Later today, US economic indicators and FOMC member chatter will likely provide further direction, with inflation and personal spending figures in focus.

A spike in inflation and spending and hawkish Fed chatter would test buyer appetite.

This morning, the NASDAQ mini was up 23.25 points, while BTC and the broader crypto market had a mixed start.

NASDAQ correlation.
NASDAQ – BTCUSD 011222 5 Minute Chart

The Fear & Greed Index Slips to 27/100 Despite NASDAQ Composite Rally

Today, the BTC Fear & Greed Index fell from 29/100 to 27/100. A bullish crypto session failed to nudge the Index closer to the Neutral zone.

Investor apprehension ahead of today’s US inflation figures and FOMC member chatter likely contributed to the modest fall. However, the Index avoided a return to the Extreme Fear zone. An increase to 30/100 would be an early signal of a BTC run at $20,000.

Avoiding sub-20/100 remains the key near-term. The bulls will need to target the pre-FTX collapse high of 40/100 (Nov 6) to support the BTC run at $20,000.

Fear & Greed Index avoids the Extreme Fear zone.
Fear & Greed 011222

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.05% to $17,189. A mixed start to the day saw BTC fall to an early low of $17,157 before rising to a high of $17,271.

BTC finds early support.
BTCUSD 011222 Daily Chart

Technical Indicators

BTC needs to avoid the $16,967 pivot to target the First Major Resistance Level (R1) at $17,488. A move through the Wednesday high of $17,275 would signal an extended breakout session. However, BTC would need US stats, FOMC member commentary, and friendly FTX-linked news updates to support a run at $18,000.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $17,796 and resistance at $18,000 before any pullback.

The Third Major Resistance Level (R3) sits at $18,625.

A fall through the pivot would bring the First Major Support Level (S1) at $16,659 into play. Barring an extended sell-off, BTC should avoid sub-$16,500 and the Second Major Support Level (S2) at $16,138. The Third Major Support Level (S3) sits at $15,309.

BTC resistance levels in play.
BTCUSD 011222 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. This morning, bitcoin sat above the 100-day EMA, currently at $16,824. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A move through R1 ($17,488) and the 200-day EMA ($17,519) would support a breakout from R2 ($17,796) to target $18,000. However, a fall through the 100-day EMA ($16,824) would bring S1 ($16,659) and the 50-day EMA ($16,594) into view.

EMAs turning bullish.
BTCUSD 011222 4 Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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