the main ideas:
- On Wednesday, Bitcoin (BTC) price increased by 0.16% to end the day at $17,813. It should be noted that BTC visited $18,000 for the second time since November 10.
- Binance news took a back seat for the second session, with a hawkish Fed rate hike weighing on the NASDAQ and cryptocurrencies.
- The Fear and Greed Index increased from 30/100 to 31/100 in response to Bitcoin’s bullish session.
On Wednesday, bitcoin (BTC) rose 0.16%. After rising 3.23% on Tuesday, BTC ended the day at $17,813. It should be noted that BTC visited $18,000 for the second time since November 10 while avoiding below $17,000.
Bullish through the morning and afternoon, bitcoin rose to a late afternoon high of $18,391, and bitcoin broke through the first major resistance level (R1) at $18,156 before retreating. The reversal saw BTC drop to $17,678. However, BTC avoided the first major support level (S1) at $17,258, and BTC rebounded to end the day in positive territory.
The hawkish Fed is sending the Nasdaq and Bitcoin into the red
After Tuesday’s US CPI report, the Fed dashed hopes of a softer interest rate path to bring inflation to target.
On Wednesday, the Federal Reserve raised interest rates by 50 basis points, in line with market expectations. However, the Fed revised its interest rate forecasts upward at the same time it revised its forecasts for economic growth downward.
A more aggressive interest rate path and economic growth outlook has led to a decline in BTC and riskier assets.
In response to the Federal Reserve, the Nasdaq fell 0.76%, and the S&P500 ended the day with a loss of 0.61%.
Today, the focus will shift to the US economic calendar and the talks of the FOMC members. Weekly jobless claims, Philadelphia Fed Manufacturing PMI, and retail sales numbers are likely to have the biggest impact.
After the Federal Reserve’s interest rate decision on Wednesday, an unexpected rise in jobless claims, a drop in retail sales and a deeper drop in manufacturing activity should test the appetite for riskier assets.
This morning the NASDAQ mini index is down 4 points.
The Fear and Greed Index rose to 31/100 in the bullish BTC session
Today the BTC Fear & Greed Index rose from 30/100 to 31/100. Notably, the index avoided a reversal in response to the Fed. BTC visited $18,000 for the second time since November 10, extending its winning streak to three sessions.
The upside came despite increased scrutiny from the legislature. The Senate Banking Committee held a hearing to discuss FTX’s demise. A common theme has been the call for strict regulations, with some lawmakers calling for cryptocurrencies to be banned in the United States.
As the dust settles from the FTX crash, suggestions of a Binance liquidity crunch will weigh heavily on the index. However, regulatory risk will be another focus for investors.
Avoiding below 100/20 remains key in the short term. The bulls will need to target the November 6 rally before FTX collapses at 40/100 to support BTC’s run to $20,000.
Bitcoin (BTC) price movement
At the time of writing, BTC is down 1.00% at $17,635. A mixed start to the day saw BTC climb to an early high of $17,867 before falling to $17,633.
Weak economic indicators from China affected investor confidence. Figures on industrial production, fixed-asset investment and retail sales fueled recession fears. However, the recent relaxation of covid-19 lockdown measures has limited the damage.
BTC needs to break the $17,961 pivot to target the first major resistance level (R1) at $18,243 and Wednesday’s high at $18,391. BTC’s return to $18,000 indicates a bullish session.
In case of an extended rally, Bitcoin (BTC) is likely to breach the second major resistance level (R2) at $18,674 to put $19,000 on the horizon. The third major resistance level (R3) is located at $19,387.
Failure to break the pivot leaves the first major support level (S1) at USD 17,530 in play. Barring the extended sell-off, BTC should avoid below $17,000, and the second major support level (S2) at $17,248 should act as a cap for the downside. The third major support level (S3) is at $16,535.
An adverse crypto market event could take less than $17,000.
Looking at the exponential moving average and the 4-hour candlestick chart (below), it was a bullish sign. This morning, Bitcoin sat above the 200-day moving average, currently at $17,334.
A bullish crossover of the 50-day EMA into the 200-day exponential moving average would support a breakout from R1 ($18,243) targeting R2 ($18,674) and $19,000. However, today’s EMA ($17,318) will put S2 ($17,248) and $17,000 into play. A drop through the 50-day EMA could signal a possible return for Bitcoin below $17,000.