BTC Fear & Greed Index Nears the Greed Zone on BTC Return to $22,000

Key Insights:

• It was a bullish Tuesday, with BTC rising by 1.95% to end the day at $22,198.
• News of Citadel Securities investing into Silvergate Bank and a Senate Committee Hearing on cryptos delivered a return to $22,000.
• The Fear & Greed Index remained within the Neutral zone despite rising from 50/100 to 53/100.

On Tuesday, bitcoin (BTC) rose by 1.95%. Reversing a 0.11% loss from Monday, BTC ended the day at $22,198. BTC saw green for the second time in seven sessions.

BTC fell to an early afternoon low of $21,555 before making a move. Steering clear of the First Major Support Level (S1) at $21,450, BTC rallied to a mid-afternoon high of $22,339. BTC broke through the First Major Resistance Level (R1) at $22,001 and briefly through the Second Major Resistance Level (R2) at $22,228 before ending the day at $21,198.

Ante-Gensler Chatter and Silvergate Bank News Delivered BTC Support

On Tuesday, US economic indicators sent BTC to a session low. In January, the US annual inflation rate softened from 6.5% to 6.4% versus a forecasted 6.2%. While inflation softened, investors hoped for a more marked weakening to ease the threat of interest rates surpassing 5%.

However, the crypto news wires delivered afternoon support and a BTC return to $22,000.

News from Capitol Hill contributed to the bullish session. On Tuesday, the Senate Banking Committee held a hearing, Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets. Questions over Gary Gensler and the SEC’s regulation by enforcement and lack of SEC guidance to crypto firms highlighted Gensler and the SEC’s failings.

There were also calls for Gensler to testify sooner rather than later, with lawmakers noting Gensler’s appearances on morning talk shows.

The questioning of Gensler and the SEC’s approach to regulating the digital asset space was enough, with crypto market participants hoping lawmakers will give the CTFC greater oversight responsibilities.

The Senate Committee Hearing came after a pickup in SEC activity that led to Kraken settling with the SEC and ceasing US crypto staking services and Paxos ceasing the issuance of Binance USD (BUSD).

News of Citadel Securities Group’s support for Silvergate Bank was also crypto market bullish. According to an SEC filing on Tuesday, the hedge fund holds a 5.5% stake in the crypto-linked bank. In response, Silvergate Capital Corp (SI) surged by 18.01% on Tuesday. However, the stock is down 86.6% over one year.

Silvergate Bank has been in the spotlight this month. Earlier this month, news hit the wires of the US Justice Department launching an investigation into Silvergate Bank for its dealings with FTX and Alameda Research.

The Day Ahead

Today, FTX, Genesis, and Silvergate Bank updates need monitoring. However, SEC chatter and the NASDAQ Composite Index will provide direction along with any Fed commentary.

US retail sales figures for January will draw interest today. A third consecutive monthly decline in retail sales could reignite recessionary fears. Weak numbers would test buyer appetite.

This morning, the NASDAQ mini was down 37.5 points. On Tuesday, the NASDAQ Composite Index rose by 0.57%.

The Fear & Greed Index Remains Neutral Despite a Bullish BTC

Today, the BTC Fear & Greed Index remained within the Neutral zone despite a BTC return to $22,000. The Index rose from 50/100 to 53/100. Chatter from Capitol Hill supported the bullish BTC session and the Index move toward the Greed zone.

Following the US CPI Report, US retail sales figures will influence today. A sharp increase in retail sales would give the Fed hawks further reason to push for a more aggressive interest rate path to curb inflation.

However, SEC activity and US lawmaker chatter will also influence.

After returning to the Neutral zone, the Index must avoid the Fear zone to support a BTC run at $23,000. However, an Index return to the Fear zone would signal a near-term bullish trend reversal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.27% to $22,138. A bearish start to the day saw BTC fall from an opening price of $22,197 to an early low of $22,120.

Technical Indicators

BTC needs to avoid a fall through the $22,031 pivot to target the First Major Resistance Level (R1) at $22,506. A move through the Tuesday high of $22,339 would signal a breakout session. The crypto news wires and US stats 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 $22,815 and resistance at $23,000. The Third Major Resistance Level (R3) sits at $22,599.

A fall through the pivot would bring the First Major Support Level (S1) at $21,722 into play. However, barring another risk-off-fueled crypto sell-off, BTC should avoid sub-$21,000. The Second Major Support Level (S2) at $21,247 should limit the downside. The Third Major Support Level (S3) sits at $20,463.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat above the 200-day EMA ($21,732). After a bearish cross on Saturday, the 50-day EMA eased further back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through the 50-day ($22,165) and 100-day ($22,312) EMAs would support a breakout from R1 ($22,506) to target R2 ($22,815) and $23,000. However, a fall through the 200-day EMA ($21,732) would bring S1 ($21,722) and sub-$21,500 into view. A move through the 50-day EMA would send a bullish signal.