Key Findings:
- Bitcoin (BTC) rose for the second time in eight sessions on Wednesday.
- While wholesale inflation numbers gave mixed signals ahead of today’s US CPI report, FOMC meeting minutes provided late support.
- The Bitcoin Fear & Greed Index remained stable at 20/100.
Bitcoin (BTC) was up 0.51% on Wednesday. BTC reversed a 0.34% loss from Tuesday to end the day at $19,160. Notably, BTC lagged behind $20,000 for the fifth consecutive day while avoiding a loss for the second time in eight sessions.
On a mixed morning, BTC fell to an early low of $19,025. BTC dodged the first major support level (S1) at $18,860 and surged to a late high of $19,233. BTC entered the area of the First Major Resistance Level (R1) at $19,263 before ending the day below $19,200.
US economic indicators and FOMC meeting minutes provided BTC and broader support for the crypto market. The key factor, however, was hope that the Fed would take its foot off the gas if there were any signs of weakening economic conditions.
This morning the probability of a 75 basis point rate hike was 84.8% in November and 28.6% in December. Today’s US CPI report is likely to decide the fate of the November move and influence sentiment towards December’s decision.
After losing 0.09% on Wednesday, the NASDAQ Mini is up 27.75 points this morning.
NASDAQ – BTCUSD 131022 5 minute chart
Fear & Greed Index remains steady as BTC avoids below $19,000
Today, the Fear & Greed Index held steady at 20/100, with a second BTC surge in eight sessions providing support. However, the index remained in extreme fear territory, reflecting investor sentiment towards the Fed, the war in Ukraine and the economic outlook.
Although we are in the extreme fear zone, the avoidance of below 20/100 suggests investor resilience, although today’s US CPI report could prove crucial.
For the bulls, the index needs to continue avoiding below 20/100 to support a sentiment reversal. However, a drop below 20/100 would signal a drop in BTC below $18,000.
Bitcoin (BTC) price action
At the time of writing, BTC is up 0.05% to $19,169. A range-bound start to the day saw BTC surge to an early high of $19,172 before falling to a low of $19,135.
BTCUSD 131022 daily chart
Technical indicators
BTC needs to avoid the $19,139 pivot to reach the First Major Resistance Level (R1) at $19,254. A BTC move through Wednesday’s high of $19,233 would signal a bullish session. However, today’s US CPI report and FOMC members’ chatter would have to be crypto-friendly to support a breakout.
In the event of an extended rally, BTC should break the second major resistance level (R2) at $19,347 to target $19,500. The third major resistance level (R3) is located at $19,555.
A fall through the pivot would likely result in BTC testing the First Major Support Level (S1) at $19,046 and support at $19,000. Barring a prolonged sell-off, BTC should avoid below $19,000 and the second major support level (S2) at $18,931.
The third major support level (S3) is at $18,723.
BTCUSD 131022 hourly chart
Looking at the EMAs and the 4-hour candlestick chart (below), this was a bearish signal. Bitcoin was below the 50-day EMA this morning, currently at $19,388.
After the bearish cross of the 50-day EMA through the 100-day EMA on Monday, the 50-day EMA slipped back from the 100-day EMA. The 100-day EMA also retreated from the 200-day EMA to provide bearish signals.
A move through R1 ($19,254) and R2 ($19,347) would target the 50-day EMA ($19,388). However, if it fails to scale above the 50-day EMA ($19,388), below $19,000 would remain in play.
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