BTC Fear & Greed Index Signals Investor Caution Ahead of US Stats

Key Insights:

• It was a bullish Wednesday, with BTC rising by 1.05% to $16,864.
• Bitcoin’s fourteen years in existence and US economic indicators delivered support alongside the NASDAQ Index while the Fed minutes weighed.
• However, the Fear & Greed Index held steady at 29/100, signaling a choppy session ahead.

On Wednesday, bitcoin (BTC) rose by 1.05%. Following a 0.01% loss on Tuesday, BTC ended the day at $16,864. Notably, BTC visited $17,000 for the first time in 21 sessions.

A bearish first hour saw BTC fall to an early morning low of $16,671. Steering clear of the First Major Support Level (S1) at $16,606, BTC rallied to a late high of $17,007. BTC broke through the First Major Resistance Level (R1) at $16,791 and the Second Major Resistance Level (R2) at $16,893 before easing back through R2 to end the day at $16,864.

US Economic Indicators and the Fed Deliver a Mixed Afternoon Session

It was a busy mid-week session, with the 14-year celebration of the Bitcoin genesis block driving demand for BTC and the broader crypto market. US economic indicators were also crypto-friendly, however.

In December, the ISM Manufacturing PMI fell from 49.0 to 48.4, with the Prices Index sliding from 43.0 to 39.4. The numbers supported bets of the Fed taking its foot off the gas.

JOLTs job openings were also crypto-friendly. Job openings slipped from 10.512 million to 10.458 million in November.

Both reports eased bets of a hawkish Fed ahead of the FOMC meeting minutes, supporting a return to $17,000. However, hawkish FOMC meeting minutes led to a late pullback, leaving BTC at sub-$17,000 at the end of the day.

The minutes removed hopes of a 2023 Fed pivot, with the Fed focused on inflation and not the economy.

According to the FOMC meeting minutes,

“No participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023.”

The NASDAQ Index rose by 0.69% on Wednesday, with the S&P 500 gaining 0.75%.

Today is a busy day on the US economic calendar. ADP nonfarm employment change and weekly jobless claims will draw plenty of interest early in the US session. Barring revisions to finalize services PMI numbers later in the day, the labor market stats will be the key before tomorrow’s Jobs report.

FOMC members Bostic and Bullard are slated to speak today, with dovish commentary likely to support BTC and the broader crypto market.

The NASDAQ mini was down 4 points this morning.

The Fear & Greed Index Holds Steady Despite Hawkish Fed Minutes

Today, the BTC Fear & Greed Index held steady at 29/100.

Notably, the Index failed to climb higher despite BTC revisiting $17,000 for the first time since December 20. The hawkish Fed minutes and caution ahead of tomorrow’s US Jobs Report likely pegged the Index back.

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 $20,000.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.18% to $16,833. A mixed start to the day saw BTC rise to an early high of $16,888 before falling to a low of $16,823.

Technical Indicators

BTC needs to move through the $16,847 pivot to target the First Major Resistance Level (R1) at $17,024. A return to $17,000 would signal a bullish session. However, the US stats need to be crypto-friendly to support a breakout session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $17,183 and resistance at $17,250. The Third Major Resistance Level (R3) sits at $17,519.

Failure to move through the pivot would leave the First Major Support Level (S1) at $16,688 in play. Barring a crypto risk-off-fueled sell-off, BTC should avoid sub-$16,500. The Second Major Support Level (S2) at $16,511 should limit the downside. The Third Major Support Level (S3) sits at $16,175.

An adverse crypto market event would bring sub-$16,000 into play.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. BTC sat above the 100-day EMA, currently at $16,773. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A move through the 200-day EMA ($16,923) would support a breakout from R1 ($17,024) to bring R2 ($17,183) into play. However, a fall through the 100-day EMA ($17,773) would give the bears a run at the 50-day EMA ($16,732) and S1 ($16,688). A fall through the 50-day EMA would be a bearish signal.