BTC Fear & Greed Index Sees Greed Signaling a BTC Return to $24,000
Key Insights:
- It was a bullish Tuesday, with BTC gaining 2.16% to end the day at $23,246.
- Fed Chair Powell delivered riskier assets with support following a first speech since the FOMC press conference and January Jobs Report.
- The Fear & Greed Index returned to the Greed zone, rising from 54/100 to 58/100.
On Tuesday, bitcoin (BTC) rallied by 2.16%. Reversing a 0.77% loss from Monday, BTC ended the day at $23,246. BTC ended a five-day losing streak and ended the day at $23,000 for the first time in three sessions.
A mixed start to the day saw BTC slip to an early low of $22,742 before making a move. Steering clear of the First Major Support Level (S1) at $22,535, BTC rallied to a late afternoon high of $23,350. BTC broke through the First Major Resistance Level (R1) at $23,060 to come within range of the Second Major Resistance Level (R2) at $23,365 before easing back.
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Fed Chair Powell Delivers a Bullish Session for Riskier Assets
Crypto market news and events took a backseat on Tuesday. Following Friday’s US Jobs Report and ISM Non-Manufacturing PMI numbers, investors were at odds over the likely impact of the stats on Fed monetary policy.
On Tuesday, Fed Chair Powell delivered his first speech since the FOMC press conference and Friday’s stats.
Fed Chair Powell was reportedly less hawkish than the markets expected, driving demand for riskier assets at the expense of the Greenback. Regarding a 2023 rate cut, Powell stated that the Fed’s decisions would be data-dependent.
The NASDAQ Index and the S&P 500 rose by 1.90% and 1.29%, respectively, supporting a broad-based crypto rally. This morning, the NASDAQ mini was down 18.25 points.
Today, investors need to monitor FOMC member chatter, with hawkish commentary likely to weigh on investor sentiment. FOMC members Williams, Barr, and Waller will deliver speeches today. The markets will likely give Williams greater weighting.
However, the crypto news wires will need consideration, with FTX, Genesis, Silvergate Bank, and regulatory chatter remaining focal points.
The Fear & Greed Index Returns to Greed on a Bullish BTC
Today, the BTC Fear & Greed Index returned to the Greed zone, rising from 54/100 to 58/100. BTC ended a five-day losing streak as investors responded to the latest Fed Chair Powell speech.
After returning to the Greed zone, the Index must avoid the Neutral zone to support a BTC run at $25,000. However, a slide into the Fear zone would signal a near-term bullish trend reversal.
Bitcoin (BTC) Price Action
At the time of writing, BTC was up 0.15% to $23,282. A mixed start to the day saw BTC fall to an early low of $23,231 before rising to a high of $23,331.
Technical Indicators
BTC needs to avoid a fall through the $23,113 pivot to target the First Major Resistance Level (R1) at $23,483 and test resistance at $23,500. A move through the Tuesday high of $23,350 would signal a breakout session. However, the crypto news wires will need to be crypto-friendly to support an extended rally.
In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $23,721 and resistance at $24,000. The Third Major Resistance Level sits at $24,329.
A fall through the pivot would bring the First Major Support Level (S1) at $22,875 into play. However, barring a risk-off-fueled crypto sell-off, BTC should avoid sub-$22,500. The Second Major Support Level (S2) at $22,505 should limit the downside. The Third Major Support Level (S3) sits at $21,897.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($23,132). The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.
A hold above the 50-day EMA ($23,132) would support a breakout from R1 ($23,483) to target R2 ($23,721) and $24,000. However, a fall through the 50-day EMA ($23,132) would bring S1 ($22,875) and the 100-day EMA ($22,747) into view. A fall through the 50-day EMA would send a bearish signal.