BTC Fear & Greed Index Stays Neutral Despite BTC Return to $22,000

Key Insights:

• It was a bullish Friday, with BTC rallying by 7.54% to end the day at $22,670.
• The NASDAQ Composite Index and market sentiment toward an FTX reboot delivered a breakout session.
• However, the Fear & Greed Index remained neutral, rising from 51/100 to 53/100.

On Friday, bitcoin (BTC) rallied by 7.54%. Following a 1.91% gain on Thursday, BTC ended the day at $22,670. Notably, BTC returned to $22,000 for the first time since September.

A mixed start to the day saw BTC fall to a mid-morning low of $20,856 before making a move. Steering clear of the First Major Support Level (S1) at $20,771, BTC surged to a late high of $22,743. BTC broke through the Major Resistance Levels to end the day at $22,670.

US Corporate Earnings, the NASDAQ Index, and FTX News Fuel Breakout

On Friday, there were no US economic indicators to draw interest, leaving US corporate earnings and Fed policy sentiment to provide direction.

Netflix (NFLX) and Alphabet (GOOGL) contributed to a NASDAQ Composite Index breakout. An increase in subscribers and news of CEO and co-founder Reed Hastings stepping down supported an 8.46% NFLX rally, while reports of GOOGL planning job cuts delivered a 5.34 Alphabet gain.

The NASDAQ Composite Index rallied by 2.66%, with the S&P 500 ending the session up by 1.89%.

Friday’s gains came despite the latest jobless claims figures from Thursday that supported a more aggressive Fed interest rate path to bring inflation to target.

While the US corporate earnings and news delivered support, crypto market news contributed to the bullish session. This week’s talk of an FTX reboot eased FTX contagion risk and supported further gains for BTC and the broader crypto market. Investors brushed aside the news of Genesis filing for bankruptcy.

Today, investors should monitor the crypto news wires for updates on FTX reboot plans, the Genesis bankruptcy, and the ongoing SEC v Ripple case. Following Friday’s breakout session, it could be a choppy day ahead.

The Fear & Greed Index Remained Neutral Despite the BTC Breakout

Today, the BTC Fear & Greed Index rose from 51/100 to 53/100. The Index remained within the Neutral zone despite the BTC return to $22,500.

The modest increase suggests mixed investor sentiment toward the January rally, with recession fears, Fed monetary policy uncertainty, and regulatory risk lingering crypto market headwinds.

However, easing FTX contagion risk remains a tailwind, supporting the reversal of the FTX-fueled crypto market meltdown.

Near-term, the Index would need to return to the Greed zone (55/100) to support a BTC run at $25,000. The Index last visited the Greed zone in March 2022.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.27% to $22,608. A mixed start to the day saw BTC rise to an early high of $22,791 before falling to a low of $22,427.

Technical Indicators

BTC needs to avoid the $22,089 pivot to target the First Major Resistance Level (R1) at $23,323. A move through the morning high of $22,791 would support a bullish session. However, the crypto news wires should be market-friendly to deliver a breakout.

In the event of another extended rally, BTC would likely test the Second Major Resistance Level (R2) at $23,977 and resistance at $24,000. The Third Major Resistance Level (R3) sits at $25,864.

A fall through the pivot would bring the First Major Support Level (S1) at $21,436 into play. Barring a risk-off-fueled sell-off, BTC should avoid sub-$21,000 and the Second Major Support Level (S2) at $20,203. The Third Major Support Level (S3) sits at $18,316.

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 $20,576. 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 ($21,436) and the 50-day EMA ($20,576) would support a breakout from R1 ($23,323) to target R2 ($23,977) and $24,000. However, a fall through S1 ($21,436) and the 50-day EMA ($20,576) would bring S2 ($20,203) into view. A fall through the 50-day EMA would signal a shift in sentiment.