BTC Fear & Greed Index Jumps to 30/100 on BTC Return to $18,000

Key Insights:

• It was a bullish Wednesday, with BTC rallying by 2.91% to end the day at $17,952.
• Crypto news updates and market sentiment toward inflation and the Fed delivered a breakout session.
• The Fear & Greed Index responded, rising from 26/100 to 30/100, signaling a marked improvement in investor sentiment.

On Wednesday, bitcoin (BTC) rose by 2.91%. Following a 1.51% gain on Tuesday, BTC ended the day at $17,952. Notably, BTC visited $18,000 for the first time since December 14 and extended its winning streak to four sessions, the second of the month.

After a range-bound morning session, BTC slipped to a mid-afternoon low of $17,316. Steering clear of the First Major Support Level (S1) at $17,231, BTC rallied to a final-hour high of $18,009. BTC broke through the First Major Resistance Level (R1) at $17,582 and the Second Major Resistance Level (R2) at $17,720 to end the day at $17,952.

FTX and Binance-Related News and the NASDAQ Index Deliver Support

On Wednesday, there were no US economic indicators to distract investors. The lack of stats supported another bullish session, with the markets betting on a 25-basis point Fed interest rate hike in February.

Following the latest ISM Manufacturing and Non-Manufacturing PMIs, investors hope that the Fed will take a less aggressive interest rate trajectory to raise unemployment and bring inflation to target. With the private sector in contraction at the end of the year, a soft landing would be the best outcome for riskier assets.

Crypto news updates added to the bullish sentiment, with FTX contagion fear abating. FTX lawyer Andy Dietderich reportedly told US bankruptcy judge John Dorsey that they located more than $5 billion in cash and cash equivalents. The FTX lawyer also announced plans to sell nonstrategic investments valued at $4.6 billion.

While a forced sale of nonstrategic assets may not reach $4.6 billion, creditors face less significant losses than initially feared, easing contagion risk.

Adding further support was news of Voyager Digital getting the green light to proceed with the sale to Binance US.

The US economic calendar will likely take center stage today, with the US CPI Report and jobless claims in focus. The numbers could decide the quantum of the Fed’s next rate hike.

A hotter-than-expected CPI report and jobless claims at sub-200k could refuel bets of a 50-basis point interest rate hike that would weigh on riskier assets. FOMC member chatter will also need consideration.

Investors should also monitor the crypto news wires for events that can move the dial.

The Fear & Greed Index Jumps to 30/100 on BTC Return to $18,000

Today, the BTC Fear & Greed Index rose from 26/100 to 30/100. Significantly, the Index moved toward the Neutral zone, with bets of a 25-basis point Fed interest rate hike delivering support.

However, crypto market headwinds continue to peg the Index back, though the latest FTX updates will ease fears of a cascading effect from the collapse of FTX.

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

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.01% to $17,951. A range-bound start to the day saw BTC rise to an early high of $17,996 before easing back.

Technical Indicators

BTC needs to avoid the $17,759 pivot to target the First Major Resistance Level (R1) at $18,202. A return to $18,000 would signal a bullish session. However, the crypto news wires and the NASDAQ Index should be market-friendly to support a breakout.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $18,452 and resistance at $18,500. The Third Major Resistance Level (R3) sits at $19,145.

A fall through the pivot would bring the First Major Support Level (S1) at $17,509 into play. Barring a US CPI Report-fueled sell-off, BTC should avoid sub-$17,000. The Second Major Support Level (S2) at $17,066 should limit the downside. The Third Major Support Level (S3) sits at $16,373.

An adverse crypto market event would bring sub-$16,500 into play.

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 $17,162. The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA crossing through the 200-day EMA, delivering bullish signals.

A hold above S1 ($17,509) and the 50-day EMA ($17,162) would support a breakout from R1 ($18,202) to target R2 ($18,452). However, a fall through S1 ($17,509) would give the bears a run at the 50-day EMA ($17,162) and S2 ($17,066). A fall through the 50-day EMA would signal a shift in sentiment.