BTC Fear & Greed Index Shows Muted Reaction to the FOMC Minutes

Key Insights:

• It was a bearish Wednesday, with BTC falling by 1.12% to end the day at $24,191.
• A mixed market reaction to the FOMC meeting minutes and sentiment toward Fed monetary policy and regulatory activity left BTC in the red.
• Despite the bearish session, the Fear & Greed Index remained within the Greed zone, holding steady at 59/100.

On Wednesday, bitcoin (BTC) fell by 1.12%. Following a 1.49% loss on Tuesday, BTC ended the day at $24,191. The bearish session left BTC short of the $25,000 handle for the second time in seven sessions. BTC fell to sub-$24,000 levels for the second time in five sessions.

A mixed start to the day saw BTC rise to an early morning high of $24,485. However, falling short of the First Major Resistance Level (R1) at $25,071, BTC slid to a late afternoon low of $23,578. BTC briefly fell through the First Major Support Level (S1) at $24,016 before ending the day at $24,191.

FOMC Meeting Minutes Leaves BTC in Mid-Week Limbo

It was a busy mid-week session, with the FOMC meeting minutes the focal point. Following a string of better-than-expected US economic indicators, investors wanted to assess how high the Fed is willing to go and for how long.

However, the minutes failed to provide any surprises. Elevated inflation, very tight labor market conditions, and the need for more rate hikes were the highlights, with only two FOMC members favoring a 50-basis point rate hike at the meeting.

BTC and the broader crypto market responded to the minutes, partially reversing losses from the session. However, the minutes are dated, with the US Jobs Report, the CPI Report, retail sales, and the ISM Non-Manufacturing PMI survey supporting a more hawkish Fed policy outlook.

The Day Ahead

It is another busy day, with the US economy in the spotlight. Q4 GDP and jobless claims will draw interest. An unexpected fall in jobless claims and upward revisions to GDP numbers would fuel bets of a more hawkish Fed. FOMC member chatter will also influence the afternoon session, with FOMC member Bostic speaking.

However, US regulatory activity and US lawmaker chatter will need continued monitoring. Investors should also track the crypto news wires for Binance, FTX, Silvergate Bank updates, and SEC v Ripple news that could move the dial.

This morning the NASDAQ mini was down 20.25 points, signaling a bearish start to the US session.

The Fear & Greed Index Holds Steady Despite a Bearish BTC

Today, the BTC Fear & Greed Index remained unchanged at 59/100. The Index remained within the Greed zone despite the bearish BTC session, signaling investor resilience amidst Fed policy uncertainty and an elevated regulatory risk environment.

The less hawkish-than-expected FOMC meeting minutes drove demand for riskier assets, which left the Index flat. However, recent economic indicators support a more hawkish Fed, which could still deliver a soft landing.

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.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.03% to $24,199. A range-bound start to the day saw BTC fall to an early low of $24,166 before rising to a high of $24,236.

Technical Indicators

BTC needs to avoid the $24,085 pivot to target the First Major Resistance Level (R1) at $24,591. A return to $24,500 would signal a breakout session. The crypto news wires and US stats 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 $24,992 and resistance at $25,000. The Third Major Resistance Level (R3) sits at $25,899.

A fall through the pivot would bring the First Major Support Level (S1) at $23,684 into play. However, barring a data-fueled crypto sell-off, BTC should avoid sub-$23,000. The Second Major Support Level (S2) at $23,178 should limit the downside.

The Third Major Support Level (S3) sits at $22,271.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($24,057). 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 ($24,057) would support a breakout from R1 ($24,591) to target R2 ($24,992) and $25,000. However, a fall through the 50-day EMA ($24,057) would give the bears a run at S1 ($23,684) and sub-$23,500. A fall through the 50-day EMA ($24,057) would send a bearish signal.