BTC Fear & Greed Index Sees Modest Rise to Signal a Choppy Session

Key Insights:

• It was a bullish start to March, with BTC rising by 2.44% to end the day at $23,707.
• Fed Fear and regulatory risk jitters took a back seat, with economic indicators from China and Visa (V) news delivering support.
• The Fear & Greed Index remained within the Neutral zone despite a BTC return to $24,000, rising from 50/100 to 51/100.

On Wednesday, bitcoin (BTC) rallied by 2.44%. Reversing a 1.53% loss from Tuesday, BTC ended the day at $23,707. The bullish session supported a BTC return to the $24,000 handle for the first time in five sessions.

A mixed start to the day saw BTC fall to an early low of $23,036. Steering clear of the First Major Support Level (S1) at $22,934, BTC rose to a late morning high of $24,009. BTC broke through the First Major Resistance Level (R1) at $23,483 and briefly through the Second Major Resistance Level (R2) at $23,823 before ending the day at $23,707.

China Economic Indicators and Visa (V) News Delivers Support

Fed Fear and regulatory risk jitters took a backseat on Wednesday. Economic indicators from China drove demand for riskier assets during the morning session. The all-important Caixin Manufacturing PMI surged from 49.2 to 51.6 in February, beating a forecasted 50.2. Significantly, the manufacturing sector expanded for the first time since July 2022.

The stats were good enough to mute the influence of US economic indicators and the NASDAQ Composite Index.

While the ISM Manufacturing PMI reflected a continued contraction across the manufacturing sector, the sub-components supported the more hawkish sentiment toward Fed monetary policy. The ISM Manufacturing Prices Index jumped from 44.5 to 51.3.

Hawkish Fed chatter also weighed on the NASDAQ Composite Index. Fed dove Kashkari is reportedly open to a 25-basis point or 50-basis point rate hike in March.

On Wednesday, the NASDAQ Composite Index fell by 0.66% in response to the stats and hawkish Fed chatter. However, the NASDAQ mini was up 17.5 points this morning.

Crypto News Wires Delivered Mixed Messages

Visa (V) addressed the rumors of company plans to hit pause on its crypto plans. Responding to a Reuters report from Tuesday, the Crypto Head at Visa, Cuy Sheffield, stated that the story was inaccurate. In a series of Tweets, Sheffield added,

“We continue to partner with crypto companies to improve fiat on and off ramps as well as progress on our product roadmap to build new products that can facilitate stablecoin payments in a secure, compliant, and convenient way.”

The response eased fears of a shift in Main Street sentiment toward the digital asset space following the collapse of FTX.

However, Silvergate Bank news tested buyer appetite. On Wednesday, the company announced a delay in its annual report filing, a red flag for investors.

The BTC Day Ahead

Economic indicators will also draw interest. US jobless claims and unit labor cost figures will influence the NASDAQ Composite Index and the broader crypto market. A fall in jobless claims and a jump in unit labor costs would be a bearish combination.

However, we expect the crypto news wires to continue providing direction. Investors should monitor the crypto news wires for regulatory activity and US lawmaker chatter. Binance and FTX updates need consideration together with news from the ongoing SEC v Ripple case.

The Fear & Greed Index Finds Support on BTC Return to $24,000

This morning, the BTC Fear & Greed Index rose from 50/100 to 51/100. Significantly, the Index avoided the Fear zone, supported by a BTC brief return to the $24,000 handle. However, the upside was modest, with regulatory activity and Fed Fear continuing to weigh on investor sentiment.

After falling into the Neutral zone, the Index must return to the Greed 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.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.10% to $23,669. A mixed start to the day saw BTC fall to an early low of $23,627 before rising to a high of $23,800.

Technical Indicators

BTC needs to avoid the $23,574 pivot to target the First Major Resistance Level (R1) at $24,132. A return to $24,000 would signal a breakout session. The crypto news wires and Fed chatter should 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 $24,557 and resistance at $25,000. The Third Major Resistance Level (R3) sits at $25,530.

A fall through the pivot would bring the First Major Support Level (S1) at $23,159 into play. However, barring another crypto event-fueled crypto sell-off, BTC should avoid sub-$22,500. The Second Major Support Level (S2) at $22,611 should limit the downside.

The Third Major Support Level (S3) sits at $21,638.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($23,577). The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($23,577) would support a breakout from R1 ($24,132) to bring R2 ($24,557) and $25,000 into view. However, a fall through the 50-day ($23,577) and the 100-day ($23,516) EMAs would give the bears a run at S1 ($23,159) and the 200-day EMA ($22,983). A fall through the 50-day EMA ($23,577) would send a bearish signal.