BTC Fear & Greed Index Climbs to 40/100 as Fed Pivot Hopes Linger

Key Insights:

• On Saturday, bitcoin (BTC) rose by 0.70% to end the day at $21,313. BTC avoided sub-$21,000 for the first time since September 12.
• Bullish sentiment from Friday spilled over to the Saturday session, delivering price support.
• The Bitcoin Fear & Greed Index jumped from 30/100 to 38/100, supported by the BTC return to $21,000.

On Saturday, bitcoin (BTC) rose by 0.70%. Following a 4.66% rally on Friday, BTC ended the day at $21,313. Notably, BTC avoided sub-$21,000 for the first time since September 12, the day before the August US CPI report.

A mixed start to the day saw BTC fall to an early low of $21,100. Steering clear of the First Major Support Level (S1) at $20,481, BTC rose to an early morning high of $21,470. However, falling short of the First Major Resistance Level (R1) at $21,573, BTC slipped back to end the day at $21,313.

Market reaction to the all-important US Jobs report continued to deliver price support. Friday’s figures suggested the Fed could take its foot off the gas.

However, investors will need to hear the views of FOMC members to support the broader market sentiment. On Wednesday, Fed Chair Powell had said that the ‘ultimate level of interest rates will be higher than previously expected.’

With BTC sensitivity to the Fed and economic indicators unlikely to shift, we expect the NASDAQ 100 mini to influence in the final hour of today’s session.

The Fear & Greed Index Climbs to 40 as BTC Holds onto $21,000

This morning, the Fear & Greed Index rose from 38/100 to 40/100. Following Saturday’s jump to 38/100, a return to 40/100 brings the Index closer to the Neutral zone. A BTC hold onto $21,000 supported the return to 40/100.

Hopes of a December Fed pivot continued to provide BTC price support and an upward trend for the Index.

The Index would need to avoid sub-40/100 and move into the neutral zone to affirm a bearish trend reversal. However, a fall to sub-20/100 would signal a BTC slide to sub-$18,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.04% to $21,322. A range-bound start to the day saw BTC fall to an early low of $21,307 before rising to a high of $21,346.

Technical Indicators

BTC needs to avoid the $21,294 pivot to target the First Major Resistance Level (R1) at $21,489 and $21,500. A return to $21,400 would signal a possible breakout session.

In the case of an extended rally, the Second Major Resistance Level (R2) at $21,664 and resistance at $22,000 would likely come into play. The Third Major Resistance Level (R3) sits at $22,034.

A fall through the pivot would bring the First Major Support Level (S1) at $21,119 into play. Barring an extended sell-off, BTC should avoid sub-$20,500. The Second Major Support Level (S2) at $20,924 should limit the downside.

The Third Major Support Level (S3) sits at $20,554.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. This morning, bitcoin sat above the 50-day EMA, currently at $20,666. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA to deliver bullish signals.

A hold above the 50-day EMA ($20,666) would support a breakout from R1 ($21,489) to target R2 ($21,664) and $22,000. However, a fall through S1 ($21,119) would bring S2 ($20,924) and the 50-day EMA ($20,666) into view.