BTC Fear and Greed Index Ignores NASDAQ in Support of Fed Pivot

Key concepts:

  • On Friday, bitcoin (BTC) fell 0.63% to end the session at $17,137. BTC escaped below $17,000 for the first time since November 7th.
  • US economic indicators and the NASDAQ Composite Index sent BTC into the red.
  • The Fear and Greed Index rose to 27/100 from 26/100, supporting bets the Fed will pivot in December.

Bitcoin (BTC) fell 0.63% on Friday. BTC ended the day at $17,137, partially reversing its 2.37% gain from Thursday. Notably, BTC avoided retracing below $17,000 for the first time since the FTX collapse.

A bullish morning session saw BTC rise to $17,366 mid-day. BTC fell to $17,053 in the afternoon, short of the First Major Resistance Level (R1) at $17,461. However, breaking away from the First Major Support Level (S1) at $16,894, BTC revisited $17,161 before pulling back.

US Economic Indicators Send BTC and NASDAQ Index South

On Friday, uncertainty over Wednesday’s Fed interest rate decision increased, while US wholesale inflation numbers muddied the waters.

In November, the annual wholesale inflation rate decreased from 8.1% to 7.4%. Although softer, economists are predicting a rate of 7.2%. In November, the producer price index increased by 0.3%, against the forecast of 0.2%.

A higher-than-expected headline number sent BTC to a session low before finding support from consumer sentiment figures for December.

The Michigan Consumer Sentiment Index rose to 59.1 from 56.8 in December. Importantly, the Inflation Expectations Index fell to 4.6% from 4.9%.

While the wholesale inflation numbers had a more sustained effect on BTC and the NASDAQ Composite Index, BTC responded to the numbers.

BTCUSD 101222 US Stats Reaction

The NASDAQ Composite Index and the S&P500 responded to the statistics, falling 0.70% and 0.74%, respectively.

NASDAQ – BTCUSD 101222 Daily Chart

Fear and Greed Index Rises Despite Bearish BTC Session

Today BTC Fear & Greed Index increased from 26/100 to 27/100. Importantly, the Index avoided falling back into the Extreme Fear zone.

BTC dropped below $17,000 for the first time since the collapse of FTX, which likely provided support for the Index.

While US wholesale inflation numbers came in higher than forecast, the downward trend supported Fed Chairman Powell’s talk of easing the pace of interest rate hikes. Markets are betting on a December Fed pivot, which continues to support the Fear and Greed Index at current levels.

In the near term, avoiding sub-20/100 remains the key issue in the near term. Bulls should target the 40/100 level before the FTX collapse on November 6 to support BTC above $20,000.

Next week will be key, with the US CPI report, the Fed’s interest rate decision and the FOMC’s economic outlook in focus.

Fear and greed 101222

Bitcoin (BTC) Price Action

BTC is up 0.15% at $17,162 at the time of writing. The day’s range-bound start saw BTC rally to an early high of $17,171 before pulling back.

BTCUSD 101222 Daily Chart

Technical indicators

BTC needs to break through the $17,185 pivot to target the First Major Resistance Level (R1) at $17,318 and this week’s high at $17,436. A move to Monday’s high of $17,436 would signal a bullish session.

In case of an extended rally, BTC is likely to break out of the Second Major Resistance Level (R2) at $17,498. The Third Key Resistance Level (R3) is $17,811.

Failure to break the pivot will leave the First Major Support Level (S1) at $17,005. Barring an extended selloff, BTC should not fall below $16,750. The Second Key Support Level (S2) at $16,872 should limit the downside. The Third Key Support Level (S3) is $16,559.

BTCUSD 101222 Hourly Chart

Looking at the EMAs and the 4-hour candlestick chart (below), this was a bullish signal. This morning, bitcoin sat below the 200-day EMA, currently at $17,315. The 50-day EMA has moved away from the 100-day EMA, while the 100-day EMA has narrowed to the 200-day EMA, giving bullish signals.

A move through the 200-day ($17,315) and R1 ($17,318) would give the bulls a run at R2 ($17,498). However, the downside of S1 ($17,005) and the 50-day ($16,996) and 100-day ($16,964) EMAs will review S2 ($16,872).

BTCUSD 101222 4 Hour Chart

Source link