BTC Fear & Greed Index Signals another Bullish BTC Session

Key Insights:

• It was a bullish Thursday, with BTC rallying by 5.04% to end the day at $18,856.
• Crypto news updates and market reaction toward US inflation and labor market stats delivered a breakout session.
• However, the Fear & Greed Index showed a muted response, rising from 30/100 to 31/100.

On Thursday, bitcoin (BTC) rallied by 5.04%. Following a 2.91% gain on Wednesday, BTC ended the day at $18,856. Notably, BTC visited $19,000 for the first time since November 8 and extended its winning streak to five sessions, its the longest winning streak since September.

After a bullish morning session, BTC fell to an early afternoon low of $17,866. Steering clear of the First Major Support Level (S1) at $17,509, BTC rallied to a late high of $19,112. BTC broke through the First Major Resistance Level (R1) at $18,202 and the Second Major Resistance Level (R2) at $18,452 to end the day at $18,856.

FTX and US Economic Indicators Fuel a BTC Breakout Session

On Thursday, US economic indicators supported riskier assets. Softer inflation numbers and steady labor market stats raised bets of a 25-basis point Fed interest rate hike in February. Significantly, the numbers also suggested a less aggressive Fed interest rate path, raising the prospects of a soft landing.

The US annual inflation rate softened from 7.1% to 6.5%, with consumer prices unexpectedly falling in December. Initial jobless claims fell from 206k to 205k in the week ending January 6.

In response to the bullish combination, the NASDAQ Index and the S&P 500 rose by 0.64% and 0.34%, respectively.

Investors continued to respond further to the latest from the bankruptcy Courts on FTX. The news from mid-week of more than $5 billion in cash and cash equivalents and nonstrategic assets with a value of $4.6 billion eased contagion from the collapse of FTX.

Today, the US economic calendar will continue to influence, with consumer sentiment figures and FOMC member chatter to draw interest. While a pickup in consumer sentiment would be bullish, hawkish commentary could test the appetite for riskier assets.

US corporate earnings will also be a focal point. Gloomy outlooks would test the appetite for riskier assets. JPMorgan Chase (JPM), Citigroup (C), and Bank of America (BAC) will release earnings results.

The NASDAQ mini was down by 12 points this morning.

The Fear & Greed Index Sees a Modest Rise Despite BTC Breakout

Today, the BTC Fear & Greed Index rose from 30/100 to 31/100. Significantly, the Index continued moving toward the Neutral zone, with bets of a 25-basis point Fed interest rate hike and a soft-landing delivering support. Despite the latest upswing, the Index sits well below the Neutral zone.

Crypto market headwinds continue to peg the Index back, though the latest FTX updates should continue easing 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 $25,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.40% to $18,781. A mixed start to the day saw BTC rise to an early high of $18,895 before falling to a low of $18,725.

Technical Indicators

BTC needs to avoid the $18,611 pivot to target the First Major Resistance Level (R1) at $19,357. A return to $19,000 would signal a bullish session. However, the crypto news wires and the NASDAQ Index should be market-friendly to support another breakout.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $19,857 and resistance at $20,000. The Third Major Resistance Level (R3) sits at $21,103.

A fall through the pivot would bring the First Major Support Level (S1) at $18,111 into play. Barring a risk-off-fueled sell-off, BTC should avoid sub-$18,000 and the Second Major Support Level (S2) at $17,365. The Third Major Support Level (S3) sits at $16,119.

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 $17,459. The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($18,111) and the 50-day EMA ($17,459) would support a breakout from R1 ($19,357) to target R2 ($19,857) and $20,000. However, a fall through S1 ($18,111) would give the bears a run at the 50-day EMA ($17,459) and S2 ($17,365). A fall through the 50-day EMA would signal a shift in sentiment.