BTC Fear & Greed Index Holds Steady to Signal a BTC Look at $27,000

Key Insights:

• It was a bullish Friday, with BTC rallying by 4.48% to end the day at $24.582.
• Easing regulatory jitters continued to drive demand for BTC and the broader crypto market following mid-week scrutiny of the SEC.
• The Fear & Greed Index remained within the Greed zone despite falling from 61/100 to 60/100.

On Friday, bitcoin (BTC) rallied by 4.48%. Reversing a 3.24% slide from Thursday, BTC ended the day at $24,582. BTC revisited $25,000 levels for the second consecutive session and the second time since August.

A mixed start to the day saw BTC fall to a first-hour low of $23,350. Steering clear of the First Major Support Level (S1) at $22,959, BTC rose to a late high of $25,023. BTC broke through the First Major Resistance Level (R1) at $24,667 before easing back to end the day at $24,582.

Easing Regulatory Risk Trumps Fed Fear

Investor jitters over the SEC and its regulation by enforcement, aimed at the digital asset space, eased further on Friday.

There were no SEC moves against crypto platforms, with the SEC busy targeting celebrities for promoting crypto.

While uncertainty over US lawmaker and regulator plans for the digital asset space lingers, US lawmaker scrutiny of the SEC eased fears of the SEC having free reign to target US crypto-related firms.

The news of the SEC charging Terra Labs and founder Do Kwon for fraud continued to have a muted impact on investor sentiment. However, this would unlikely be the case should the SEC target US platforms that could materially impact growth in the domestic crypto market.

Investor sentiment toward the SEC supported a BTC decoupling from the NASDAQ Composite Index, which declined by 0.58% on Friday. Fed Fear weighed on the NASDAQ, with investors fretting over a more aggressive interest rate trajectory to bring inflation to target.

The Day Ahead

With no US economic indicators for investors to consider, BTC and the broader market will sit in the hands of the crypto news wires today.

Binance, FTX, Genesis, and Silvergate Bank will likely remain areas of interest. Increased US regulatory activity has fueled rumors of Binance delisting every US-based crypto. Binance CEO CZ responded to the FUD, saying,

“We pulled back on some potential investments or bids on bankrupt companies in the US for now. Seek permission first.”

We expect further updates on Binance’s plans for the US to draw interest. Investors should continue to monitor the crypto news wires for SEC v Ripple, FTX, Genesis, and Silvergate Bank updates. A Ripple victory in the SEC v Ripple could be the next price catalyst.

The Fear & Greed Index Remains in the Greed Zone Despite a Friday Slip

Today, the BTC Fear & Greed Index showed a muted response to the bullish BTC session. The Index remained within the Greed zone, falling from 61/100 to 60/100. The modest decline reflected investor consideration of lingering headwinds, which include Fed monetary policy and regulatory risk.

However, easing regulatory jitters and US lawmaker chatter returned the Index to the Greed zone. We expect the further easing of regulatory risk to trump Fed Fear. A US crypto regulatory framework that protects investors and supports innovation would be a bullish development.

After returning to the Greed zone, the Index must avoid the Neutral zone to support a BTC breakout from $25,000 to target $30,000. However, an Index return to the Fear zone would signal a near-term bullish trend reversal.

SEC activity and US lawmaker chatter will remain the key drivers over the near term.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.50% to $24,705. A mixed start to the day saw BTC fall to an early low of $24,553 before rising to a high of $24,790.

Technical Indicators

BTC needs to avoid a fall through the $24,318 pivot to target the First Major Resistance Level (R1) at $25,287. A return to $25,000 would signal a breakout session. The crypto news wires 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 $25,991 and resistance at $27,000. The Third Major Resistance Level (R3) sits at $27,664.

A fall through the pivot would bring the First Major Support Level (S1) at $23,614 into play. However, barring a crypto event-fueled crypto sell-off, BTC should avoid sub-$23,000 and the Second Major Support Level (S2) at $22,645.

The Third Major Support Level (S3) sits at $20,972.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($23,141). The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($23,614) and the 50-day EMA ($23,141) would support a breakout from R1 ($25,287) to target R2 ($25,991) and $27,000. However, a fall through S1 ($23,614) and 50-day EMA ($23,141) would give the bears a run at S2 ($22,645). A fall through the 50-day EMA would send a bearish signal.