- BTC had a bullish Saturday, rising 5.20% to end the day at $20,966.
- Sentiment on FTX contagion and the Fed’s monetary policy remained the main drivers on Saturday.
- The Fear and Greed Index rose from 46/100 to 52/100 as BTC returned to $21,000.
Bitcoin (BTC) rose 5.20% on Saturday. After losing 5.70% on Friday, BTC ended the day at $20,966. Notably, BTC visited $21,000 for the first time since November 7, extending its winning streak to seven sessions, the longest since March 2022.
The bullish first hour saw BTC rally from a low of $19,897 to $21,378 before pulling back. BTC crossed the First Major Resistance Level (R1) at $20,378 and the Second Major Resistance Level (R2) at $20,827. However, the pullback saw BTC briefly retreat from R2 and R1 before ending the day at $20,966.
FTX and US Economic Indicators and Corporate Earnings give $21,000
The bullish momentum from Friday continued into the Saturday session. Sentiment on the Fed’s monetary policy, the US economic outlook and good corporate earnings supported riskier assets on Friday.
However, the reduced risk of FTX contagion supported the reversal of losses caused by FTX spillage. News of $5 billion in cash and cash equivalents and $4.6 billion in non-strategic assets continued to resonate on Saturday. While the forced sale of non-strategic assets fell short of $4.6 billion, the numbers suggest creditor losses could be minimal.
While sentiment toward FTX and the Fed and the US economy is bullish on BTC, regulatory risk remains a headwind. The outcome of the SEC v Ripple case and the regulatory SEC may test buyers at current levels. There is a high degree of uncertainty about the regulatory landscape that is likely to change after Terra Labs and FTX.
There are no external market forces to affect today as the US markets are closed on Monday. However, investors should keep an eye on cryptocurrency news. FTX updates and regulatory conversations should be considered.
The Fear and Greed Index responds to BTC’s return to $21,000
Today BTC Fear & Greed Index rose from 46/100 to 52/100. Importantly, the Index returned to the Neutral zone for the first time since August 14, 2022. Easing FTX contagion, bets on a 25 basis point Fed rate hike and hopes of a soft downside supported BTC’s return to $21,000 and the Index. Get out of the fear zone.
Avoiding sub-20/100 and reversing the decline in response to the FTX collapse, the Index should return to the Greed zone to support BTC’s move towards $25,000.
Bitcoin (BTC) Price Action
At the time of writing, BTC is down 1.12% to $20,732. A mixed start to the day saw BTC rise as high as $21,012 before settling back to $20,566.
BTC needs to break through the $20,747 pivot to target the First Major Resistance Level (R1) at $21,597. A move up to $21,378 on Saturday would support another bullish session. However, cryptocurrency news should be market-friendly to support another breakout.
In the case of an extended rally, BTC is likely to test the Second Major Resistance Level (R2) at $22,228 and resistance at $22,500. The Third Key Resistance Level (R3) is $23,709.
Failure to break the pivot will leave the First Major Support Level (S1) at $20,116. Barring a sell-off related to the cryptocurrency event, BTC should avoid the Second Key Support Level (S2) below $20,000 and at $19,266. The Third Key Support Level (S3) is $17,785.
Looking at the EMAs and the 4-hour candlestick chart (below), this was a bullish signal. BTC sat above the 50-day EMA, currently at $18,623. The 50-day EMA has moved away from the 200-day EMA, while the 100-day EMA has extended from the 200-day EMA, giving bullish signals.
A hold above the 50-day EMA ($18,623) would support a move from R1 ($21,597) to target R2 ($22,228). However, a break into S1 ($20,116) would allow the bears to run through S2 ($19,266) and the 50-day EMA ($18,623). A break below the 50-day EMA would indicate a change in sentiment.
Looking at the trends, BTC needs to break through August’s $25,203 and $25,500 to target the June high of $31,956. Avoiding the drop to $18,210 in September would support a pullback towards $25,000.
However, after Wednesday’s new September, the trend turned bearish. A drop to the September low of $18,210 would trigger a break below $18,000, and the June low of $17,601. A return to 30/100 in the Fear and Greed Index should support the turnaround in sentiment.
Bitcoin, Fear & Greed Index, BTC, Bitcoin, NASDAQ Composite Index, cryptocurrency, cryptocurrency, cryptocurrencies, cryptocurrencies, Federal Reserve, Fed, FTX
Working on Bitcoin Fear and Greed Index – Review of price action from the previous day and key drivers – Transition to NASDAQ – Fear and Greed Index trends – BTC price action for the day ahead – Includes resistance pivot and support, EMAs and Trend analysis. .