Bitcoin (BTC) in the Hands of U.S Inflation and the NASDAQ 100 Response

Bitcoin (BTC) extended its winning streak to 4 sessions on Wednesday, marking a 6^th rise in 7-sessions. Following a 0.50% gain on Tuesday, Bitcoin rose by 0.78% to end the day at $44,423.

While recovering from deep red and a return to sub-$43,500 levels, Bitcoin failed to revisit $45,000 levels on the day.

Once more, a bullish NASDAQ 100 session on Wednesday delivered support for Bitcoin and the broader market. On Wednesday, the NASDAQ 100 rallied by 2.08%. Bitcoin’s upside was modest, however, as the markets continue to face a number of uncertainties near-term.

XRP bucked the broader market trend, falling by 0.43%. The loss was modest, however, with XRP continuing its run towards $1.00 levels on hopes of a favorable outcome to the SEC v Ripple case.

Bitcoin Fear & Greed Index Falls Back

A 6^th rise in 7 sessions was not enough, however, to support another increase in the Bitcoin Fear & Greed Index. After rising to 54/100 on Wednesday, the Index slipped back to 50/100 this morning. In spite of the pullback, the Index remained in the neutral zone after failing to move through to 55/100 and into the Greed zone.

Last month, we had seen a move to 30/100 as a buying signal and this month a move through to 50/100 supportive of a Bitcoin return to $50,000 levels. Following this morning’s pullback, however, a fall back to sub-46/100 and into the fear zone could test Bitcoin support near-term.

Key Bitcoin drivers near-term include today’s U.S inflation figures and the imminent White House Executive order on crypto regulations. On the economic data front, another pickup in inflationary pressure would support the more hawkish outlook on FED monetary policy. For Bitcoin and the broader market, punitive regulations to rein in the crypto market would also be negative near-term.

Bitcoin Price Action

At the time of writing, Bitcoin was down by 0.49% to $44,206. Avoiding a fall back through the day’s $44,147 pivot would support a run at the first major resistance level at $45,126 and Tuesday’s high $45,484. Bitcoin would need plenty of support to break back through to $45,000 levels, however. In the event of an extended rally, Bitcoin could test resistance at $47,000 before any pullback. The second major resistance level sits at $45,830.

A fall back through the pivot would bring the first major support level at $43,443 into play. Barring an extended sell-off, Bitcoin should steer clear of sub-$42,000 levels. The second major support level at $42,464 should limit the downside. Today’s U.S inflation figures will be key.

Looking at the EMAs and 4-hourly candlesticks (below), the signal has become more bullish. The 50-day EMA has pulled further away from 200-day EMA after this week’s bullish cross. The 100-day EMA has also narrowed on the 200-day EMA. A bullish cross of the 100-day through the 200-day EMA would further support a move towards $50,000 levels.