Key Findings:
- On Friday, Bitcoin (BTC) slipped 0.63% to end the session at $17,137. Though bearish, BTC avoided going below $17,000 for the first time since Nov. 7.
- US economic indicators and the NASDAQ Composite Index sent BTC lower.
- The Fear & Greed Index rose to 27/100 from 26/100, supporting bets on a December Fed pivot.
Bitcoin (BTC) fell 0.63% on Friday. BTC partially reversed Thursday’s 2.37% gain to end the day at $17,137. Notably, BTC avoided a return below $17,000 for the first time since FTX collapsed.
In a bullish morning session, BTC surged to a midday high of $17,366. BTC missed the first major resistance level (R1) at $17,461 and fell to an early afternoon low of $17,053. However, BTC stayed away from the first major support level (S1) at $16,894 and revisited $17,161 before easing back down.
US economic indicators send BTC and the NASDAQ index south
Uncertainty grew on Friday surrounding Wednesday’s Fed interest rate decision, with U.S. hyperinflation numbers clouding the waters.
Annual wholesale inflation fell to 7.4% in November from 8.1%. Though softer, economists are forecasting a rate of 7.2%. In November, the PPI rose 0.3% versus 0.2% forecast.
The higher-than-expected headline figure sent BTC to session lows before finding support from December consumer sentiment numbers.
The Michigan Consumer Sentiment Index rose to 59.1 from 56.8 in December. Notably, the Index of Inflation Expectations fell to 4.6% from 4.9%.
BTC reacted to the numbers, although the wholesale inflation numbers had a more lasting impact on BTC and the NASDAQ Composite Index.
BTCUSD 101222 US Stats Reaction
The NASDAQ Composite Index and S&P500 reacted to the stats, falling 0.70% and 0.74%, respectively.
NASDAQ – BTCUSD 101222 daily chart
Fear & Greed Index surges higher despite BTC bearish session
Today, the BTC Fear & Greed Index rose to 27/100 from 26/100. Significantly, the index avoided a relapse into the extreme fear zone.
BTC avoided going below $17,000 for the first time since FTX collapse, likely providing index support.
While US wholesale inflation numbers came in higher than forecast, the downtrend supported Fed Chair Powell’s speech about easing rate hikes. Markets are banking on a December Fed pivot that will continue to support the Fear & Greed Index at current levels.
In the short term, avoiding below 20/100 remains key in the short term. The bulls need to target the 40/100 pre-FTX collapse Nov. 6 high to support a BTC run at $20,000.
The next week will prove crucial with US CPI report, Fed rate decision and FOMC economic forecasts taking center stage.
Fear & Greed 101222
Bitcoin (BTC) price action
At the time of writing, BTC is up 0.15% to $17,162. A range-bound start to the day saw BTC surge to an early high of $17,171 before retreating.
BTCUSD 101222 daily chart
Technical indicators
BTC needs to move through the $17,185 pivot to target the First Major Resistance Level (R1) at $17,318 and this week’s high of $17,436. A move above Monday’s high of $17,436 would signal a bullish session.
In the event of an extended rally, BTC would likely break above the second major resistance level (R2) at $17,498. The third major resistance level (R3) is located at $17,811.
If the pivot is not breached, the First Major Support Level (S1) would remain in play at $17,005. Barring a prolonged selloff, BTC should avoid going below $16,750. The second major support level (S2) at $16,872 should limit the downside. The third major support level (S3) is at $16,559.
BTCUSD 101222 hourly chart
Looking at the EMAs and the 4-hour candlestick chart (below), this was a bullish signal. Bitcoin was below the 200-day EMA this morning, currently at $17,315. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA tightening to the 200-day EMA, providing bullish signals.
A move through the 200-day ($17,315) and R1 ($17,318) would give the bulls a run on R2 ($17,498). However, a drop through S1 ($17,005) and the 50-day ($16,996) and 100-day EMAs ($16,964) would put S2 ($16,872) in sight.
BTCUSD 101222 4 hour chart
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