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BTC Fear & Greed Index Rises on US Stats and NASDAQ Index Support

By:
Bob Mason
Updated: Nov 16, 2022, 10:11 GMT+00:00

BTC avoided sub-$16,000 on Tuesday, with softer US wholesale inflation figures and sentiment toward the Binance recovery fund providing support.

BTC Technical Analysis - FX Empire

Key Insights:

  • On Tuesday, bitcoin (BTC) rose by 1.56%. Marking the third gain from ten sessions, BTC ended the day at $16,886.
  • Softer US wholesale inflation figures and the NASDAQ Composite Index provided support though gains were modest as contagion fear lingered.
  • However, the Bitcoin Fear & Greed Index rose from 22/100 to 23/100, supported by a BTC revisit to $17,000.

On Tuesday, bitcoin (BTC) rose by 1.56%. Following a 1.72% gain from Monday, BTC ended the day at $16,886. Notably, BTC logged the third gain from ten sessions while ending the day at sub-$17,000 for the fifth time since 2020.

A mixed start to the day saw BTC fall to an early low of $16,543. Steering clear of sub-$16,000 and the First Major Support Level (S1) at $15,899, BTC rose to an early afternoon high of $17,132. However, coming up short of the First Major Resistance Level (R1) at $17,277, BTC ended the day at sub-$17,000.

US economic indicators provided modest support on Tuesday. The US wholesale inflation rate softened from 8.4% to 8.0% in October, fueling the bets of a December Fed pivot. The NASDAQ Composite Index gained 1.45% on Tuesday, supported by the softer numbers that also delivered BTC price support.

However, contagion fear lingered. Crypto exchange Liquid froze withdrawals on Tuesday, limiting the upside for BTC.

Later today, US retail sales numbers may deliver further direction. Orderly market conditions would likely see BTC sensitivity to US economic indicators and the NASDAQ Composite Index return to normal. This morning, the NASDAQ mini was down 57.25 points.

NASDAQ correlation.
NASDAQ – BTCUSD 161122 5 Minute Chart

The Fear & Greed Index Inches Higher but Remains in Extreme Fear

Today, the Fear & Greed Index increased from 22/100 to 23/100. Despite the modest increase, the Index remained within the Extreme Fear zone, reflecting investor sentiment toward the FTX collapse. Contagion fear will likely linger over the near term, which could pin the Index at sub-30.

However, BTC avoided sub-$16,000 levels on Tuesday, and sensitivity to US economic indicators suggested a normalization of market conditions. Barring another major crypto exchange collapse, the Index could start moving toward 30.

The Index would need to avoid sub-20/100 to support a return to 40 and a move into the neutral zone. However, a fall to sub-20/100 would see BTC face the risk of sub-$10,000.

Fear & Greed Index remains in the extreme fear zone.
Fear & Greed 161122

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.48% to $16,805. A range-bound start to the day saw BTC rise to an early high of $16,919 before falling to a low of $16,788.

BTC under early pressure.
BTCUSD 161122 Daily Chart

Technical Indicators

BTC needs to move through the $16,854 pivot to target the First Major Resistance Level (R1) at $17,164 and the Tuesday high of $17,132. A return to $17,000 would signal a bullish session. However, the direction will hinge on several factors, including FTX updates, contagion news, Binance recovery fund details, and US stats.

In the case of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $17,443 and resistance at $17,500.

The Third Major Resistance Level (R3) sits at $18,032.

Failure to move through the pivot would leave the First Major Support Level (S1) at $16,575 in play. Barring another extended sell-off, BTC should avoid sub-$16,000. The Second Major Support Level (S2) at $16,265 should limit the downside.

The Third Major Support Level (S3) sits at $15,676.

BTC support levels in play below the pivot.
BTCUSD 161122 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $17,476. The 50-day EMA fell back from the 200-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A BTC move through R1 ($17,164) would give the bulls a run at R2 ($17,443) and the 50-day EMA ($17,476). However, failure to move through the 50-day EMA would leave BTC under pressure and S1 ($16,575) in view.

EMAs bearish.
BTCUSD 161122 4 Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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