BTC Fear & Greed Index Stays Greedy Despite a Bearish BTC

Key Insights:

• It was a bearish Friday, with BTC falling by 0.25% to end the day at $23,433.
• US economic indicators, corporate earnings, and the NASDAQ Index delivered a choppy afternoon session.
• The Fear & Greed Index slipped from 60/100 to 58/100 but remained within the Greed zone.

On Friday, bitcoin (BTC) fell by 0.25%. Following a 0.98% decline on Thursday, BTC ended the day at $23,433. Despite the bearish session, BTC avoided a return to $23,000 for a second consecutive session.

After a range-bound morning, BTC rose to a late afternoon high of $23,708. Coming up short of the First Major Resistance Level (R1) at $24,026, BTC fell to a low of $23,230. However, steering clear of the First Major Support Level (S1) at $23,171, BTC found late support to end the day at $23,433.

US Economic Indicators and the NASDAQ Index Refuel Fed Jitters

It was a busy Friday session, with US economic indicators coming in hotter than expected to catch investors by surprise.

In January, nonfarm payrolls surged by 517k versus a forecasted 185k rise and a 260k increase in December. Wage growth was also better than expected, rising by 4.4% year-over-year versus a forecasted 4.3% while down from 4.8% in December.

The surge in nonfarm payrolls took the unemployment rate down to 3.4%, well below the Fed’s 5% mandate.

Wrapping up an impressive set of indicators, the ISM Non-Manufacturing PMI jumped from 49.2 to 55.2, removing immediate fears of a recession. However, the latest numbers could give the Fed reason to deliver a more hawkish policy move in March.

Looking at the sub-components, the ISM Non-Manufacturing Price Index slipped from 68.1 to 67.8, while the Employment Index increased from 49.4 to 50.0.

The numbers point to an increase in consumption that may deliver a demand-driven pickup in inflationary pressure, thus placing greater emphasis on the January CPI report.

In response, the NASDAQ Index slid by 1.59%, with Apple (AAPL) and Alphabet Inc. (GOOGL) joining Amazon.com (AMZN) in delivering disappointing results and gloomy outlooks, adding to the bearish mood.

There were no crypto events to distract investors, leaving BTC on the back foot. However, the loss was modest, supported by a bullish broader crypto market session. While regulatory risk remains a headwind, easing FTX and Genesis contagion risk and increased activity across major networks are near-term tailwinds.

Today, investors need to monitor the crypto news wires for Silvergate Bank, FTX, and Genesis news. A quiet session would leave Friday’s US stats to test buyer appetite, with investors likely to weigh the threat of a more hawkish Fed.

The Fear & Greed Index Remains Greedy Despite Bearish BTC Session

Today, the BTC Fear & Greed Index slipped from 60/100 to 58/100. US economic indicators and corporate earnings weighed on investor sentiment. While the economic indicators removed the immediate threat of a US recession, they likely increased the chances of a 50-basis point Fed interest rate hike in March.

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 down 0.20% to $23,387. A range-bound start to the day saw BTC rise to an early high of $23,456 before easing back.

Technical Indicators

BTC needs to move through the $23,457 pivot to target the First Major Resistance Level (R1) at $23,684 and the Friday high of $23,708. A return to $23,500 would signal a bullish 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 $23,935 and resistance at $24,000. The Third Major Resistance Level sits at $24,413.

Failure to move through the pivot would leave the First Major Support Level (S1) at $23,206 in play. However, barring a risk-off-fueled crypto sell-off, BTC should avoid sub-$23,000 and the Second Major Support Level (S2) at $22,979. The Third Major Support Level (S3) sits at $22,501.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA, currently at $23,217. 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 hold above the 50-day EMA ($23,217) would support a breakout from R1 ($23,684) to target R2 ($23,935) and $24,000. However, a fall through the 50-day EMA ($23,217) and S1 ($23,206) would give the bears a run at S2 ($22,979). A fall through the 50-day EMA would send a bearish signal.