BTC Fear & Greed Indicator indicates BTC is back towards $25,000

the main ideas:

  • It was a bullish Wednesday, as BTC closed the session at $23,000 for the first time since August 18th.
  • Bitcoin and the broader crypto market have decoupled from the Nasdaq. A lighter infection gave FTX and Gemini support.
  • The Fear and Greed Index increased from 51/100 to 54/100 but remained within neutral territory.

On Wednesday, Bitcoin (BTC) rose 1.89%. Reversing the 1.24% drop from Tuesday, BTC ended the day at $23,054. It should be noted that BTC held the $23,000 handle for the first time since August 18th.

A bearish start to the day saw BTC drop to an early low of $22,324. After finding support at the first major support level (S1) at $22,325, bitcoin rose to a late high of $23,812. BTC broke through the first major resistance level (R1) at $23,042 and briefly through the second major resistance level (R2) at $23,456 before retreating to end the day at $23,054.

Reducing the risk of infection runs BTC at $24,000

It was a quiet day in the US economic calendar, as US economic indicators did not provide guidance. US corporate earnings also failed to move demand. Disappointing US corporate earnings weighed on the Nasdaq, which fell 0.18%. The gloomy outlook fueled recession fears, leaving the Nasdaq in the red.

Nasdaq – BTCUSD 260123 hourly chart

But mitigating the risk of infection has supported BTC and the broader crypto market. Hope for an FTX revival and the prospect of a painless Genesis bankruptcy continued to drive demand for crypto assets.

Goldman Sachs (GS) a report Bitcoin’s ranking as the best performing asset in the world also made its rounds and supported the bullish session. On a total return basis, BTC has outperformed the MSCI Emerging Markets Index and asset classes, including gold, the 10-year US Treasury, and the NASDAQ index.

Today, Genesis and FTX will remain in the spotlight. But US economic indicators will also attract attention, as US GDP and jobless claims are likely to influence sentiment towards the US economic outlook and the Federal Reserve’s monetary policy.

The Fear and Greed Index remains neutral despite Bitcoin’s rally

Today the BTC Fear & Greed Index rose from 51/100 to 54/100. Despite the increase, the index remained within neutral territory. But the indicator is approaching the greedy zone, which indicates further Bitcoin gains.

BTC held the $23,000 handle on Wednesday, supporting a move towards greed territory as investors reacted to mitigate the risk of FTX and Genesis contagion.

However, uncertainty about the US economic outlook, the Federal Reserve’s monetary policy, and the regulatory environment dragged the index lower.

In the short term, the index will need to return to the greedy zone (55/100) to support BTC running at $25,000. The index last visited the greedy zone in March 2022.

Fear and greed 260123

Bitcoin (BTC) price movement

At the time of writing, BTC was up 0.74% at $23,225, and a bullish start to the day saw BTC rally from an early low of $23,054 to $23,273.

BTCUSD 260123 daily chart

Technical indicators

BTC needs to avoid a fall through the $23,063 pivot to target the first major resistance level (R1) at $23,803 and Wednesday’s high at $23,812. A rebound towards $23,500 will support a bullish session. However, cryptocurrency news and US economic indicators have to be market friendly to produce a breakout.

In case of another extended rally, BTC is likely to test the second major resistance level (R2) at $24,551 and the resistance at $25,000. The third major resistance level (R3) is located at $26,039.

A fall through the pivot would put the first major support level (S1) at $22,315. Barring a large-scale crypto sell-off, BTC should avoid below $22,000 and the second major support level (S2) at $21,575. The third major support level (S3) is at $20,087.

BTCUSD 260123 hourly chart

Looking at the exponential moving average and the 4-hour candlestick chart (below), it was a bullish sign. Bitcoin sat above the 50-day moving average, currently at $22,159. The 50-day EMA has moved away from the 200-day EMA, with the 100-day EMA widening from the 200-day EMA, giving bullish signals.

Holding above S1 ($22,315) and 50-day EMA ($22,159) would support a breakout from R1 ($23,803) to target R2 ($24,551) and $25,000. Give the bears a run at S2 ($21,575). A decline through the 50-day moving average could indicate a change in sentiment.

BTCUSD 260123 4-hour chart

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