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Bitcoin Fear and Green Index Newsletter. Block 24

Bitcoin Fear and Green Index Newsletter. Block 24
By Bitcoin Fear And Greed Index • Issue #24 • View online
Welcome to this week’s issue of Bitcoin Fear and Green Index Newsletter. It is a community-driven effort, and we all hope to see this newsletter grow with quality insight and analytics from community contributors like yourself. Read till the end to learn how you can participate.

Current Bitcoin Fear and Greed Index
This week’s Technical Analysis
This past week, Bitcoin went through the stress of setting a lower low at $33,000 and the relief of bouncing 17% from it. In today’s newsletter, I’ll be covering the immediate targets that Bitcoin has to accomplish in order to regain some bullish momentum moving forward. I’ll also detail the steps Bitcoin would have to take to brace itself against a potential capitulation event in March, assuming that the Fed announces a rate increase.
Immediate Targets:
Looking at the chart above, we see Bitcoin with 3 previous unsuccessful tests of the 21 EMA. More importantly, we see Bitcoin currently approaching the moving average once again, in an attempt to break the downtrend and reverse the momentum. Knowing that the 21 EMA can dictate the trajectory of the short-term trend makes this upcoming test all the more significant. The first target for Bitcoin in the immediate short-term is to break above the 21 EMA, but even more importantly, to successfully re-test the moving average after the break. The re-test (illustrated on the chart) would have Bitcoin breaking above the moving average, and then successfully holding it as a level of support over a short period of time, before eventually bouncing from that level into higher highs.
The next target for Bitcoin would then become a test of the 200 day point of control. The point of control (horizontal blue line) represents the price level with the highest traded volume over a specific period of time. In this case, the point of control spans 200 days, with the price level of $47,000. This level should prove to be significant resistance for Bitcoin over the short-term, thus making it an aggressive second target for Bitcoin. This target only Involves Bitcoin testing the point of control and not necessarily breaking it. The reason is that if Bitcoin approaches the point of control anywhere in the next 4 to 8 weeks, that move alone would signify an exceptionally bullish reversal in momentum (40% from local bottom), rendering the break of that level not of immediate significance.
Bracing For Capitulation:
In the event where the Fed announces an interest rate increase on March 16, this is how Bitcoin could brace itself against a potentially dangerous capitulation event. The chart above illustrates the scheme. First, a rally has to be established somewhere during February. This rally would have to take Bitcoin above $40,000 and have Bitcoin hold that level temporarily. So far, Bitcoin would’ve separated itself from the lows of both ranges ($28,800 & $33,000) and established a transitory base around $40,000 until the potential capitulation event. Assuming the capitulation takes place, Bitcoin would then have enough separation to reduce the risk of breaking below the lowest range, especially when considering the support plating around the high volume node ($36,000), which should be able to quickly pull the price from an excessively sharp drop, producing a V-shaped recovery. The main goal of this scheme is to avoid breaking the lowest range ($28,800).
The Stock Market:
Looking at the S&P 500 chart above, we notice a significant rally in price, effectively taking the index back above the significant 200 day moving average, as well as the resistance level of 4490. The next immediate target for the S&P 500 would be to hold the 200 MA as support. That hold alone could have many bullish implications regarding the short-term future of the stock market and Bitcoin. This includes the potentiality of a reversal and an encouraging market sentiment.
Bitcoin at 37k is still more fungible, divisible, portable, storable, scarce, and decentralized than Gold. Don’t let the short-term trend cloud your judgement. Bitcoin is inevitable.
With that said, have a bullish week, until we meet again.
TA review by @CryptoSultan21
Technical Analysis (V2)
Volatility incoming. Prepare and take advantage of the volatility.
Volatility is a feature of the crypto market, not a bug and it swings in both directions.
This has been a crucial week for the markets, given the overshadow of the FOMC meeting. The market seems to have priced in FED’s rather hawkish outlook with regards to interest rate hike and quantitative tightening. At the time of writing this newsletter, Bitcoin is trading 47% below it’s recent Nov ‘21 peak. In the absence of any new policy change, Bitcoin and the rest of the Crypto market at large could see a relief rally in Feb 2022.
BTC's June fractal comparison
BTC's June fractal comparison
If Bitcoin’s current price action continues to follow BTC’s fractal from summer of 2018 (in the short term), it is likely that we head back down to form a double bottom / higher low around the $33k-$35k region. If the bulls succeed in defending the recent pivot low at $32,900, we could see bullish momentum in Feb ‘22 as BTC could make a retrace to the $41,400 region where it is likely to find sellers into this area of resistance.
  • Key levels of support: $32,900; $30,000, $28,500, $20,000
  • Key levels of resistance: $41,400; $46700; $50,000 & $55000
S&P 500 Vs BTC
S&P 500 Vs BTC
What if, we loose the summer lows?
In a situation that the $30,000 level does not hold, we could see BTC'a price visit the $27000-28000 region. In the past, we have see a similar pattern play out for S&P 500 during the 2007-2009 sub-prime crisis.
BLX monthly Logarithmic chart
BLX monthly Logarithmic chart
On the monthly timeframe, BTC is still bullish and the primary trend is up. As long as the parabola is not broken on the monthly timeframe, a 2013 style run towards the upper band of the Logarithmic channel to the $200,000 levels towards late 2022 / early 2023 is still on the cards. This is a great time to dollar cost average into BTC positions and take full advantage of the volatility that is around the corner!
Stay safe, stay awesome!
TA review by @CryptoGaga01
Bitcoin Adoption News This Week
“Success is not measured by what you accomplish, but by the opposition you have encountered, and the courage with which you have maintained the struggle against overwhelming odds.” - Orison Swett Marden on Bitcoin.
Belarus To Keep Liberal Bitcoin Rules; Russia Seeks Regulation
Belarus is reportedly not inclined to change its permissive bitcoin trading rules despite its neighbor and ally Russia having been drawn to considering a complete ban of trading and mining. Bloomberg reported that Belarus’ cryptocurrency regulator, Hi-Tech Park, does not have plans to tighten its liberal bitcoin-related legislation. “Restrictive changes to the existing regulatory model are not currently foreseen,” the press service of Hi-Tech Park, the Belarusian crypto-currency regulator, told Bloomberg by email. In 2017, Belarus introduced a set of laws to encourage novel developments in the cryptocurrency space and granted its citizens the ability to buy, sell, hold, and mine bitcoin. Belarusians are also not required to report their bitcoin purchases and sales to tax authorities. Neighboring Russia has recently dabbled with increasing regulatory scrutiny towards bitcoin but different authorities have expressed contrasting views. Last week, Bloomberg reported that the Bank of Russia proposed a blanket ban on the use and mining of all cryptocurrencies. On the other hand, the Russian Ministry of Finance called for regulation, instead of a ban, confronting the central bank’s view and warning that prohibiting bitcoin mining and trading entirely could lead to Russia being left behind in the innovation technology industry. “We need to regulate, not ban,” said Ivan Chebeskov, director of the financial policy department of the Ministry of Finance. “Regulation will protect citizens.” If a ban were to be enacted, Russia would lose most of their miners to another country and arguably not be able to enforce a trading ban.
IMF Urges El Salvador To Ditch Bitcoin
The executive board of the International Monetary Fund issued a statement urging El Salvador to remove Bitcoin’s legal tender status in the country, citing concerns over risks the digital currency allegedly poses to financial stability and market integrity. The recommendation from the IMF comes as directors seek to stir the Central American country back to a position of better odds of receiving the $1.3 billion loan it asked the international institution for last year as high debt leads to increasing financing needs, the directors noted in the statement. The IMF has been vocal against the move from the beginning, and said the adoption of bitcoin as legal tender by the Central American country “entails large risks for financial and market integrity, financial stability, and consumer protection” and fiscal contingent liabilities. IMF directors “urged the authorities to narrow the scope of the Bitcoin law by removing Bitcoin’s legal tender status,” the statement said. Some directors also expressed concern over the idea of issuing bitcoin-backed loans, an initiative put forward by Bukele last year in cooperation with Blockstream, the company behind Bitcoin’s Liquid sidechain. However, directors didn’t specify what aspects of the bitcoin bonds they considered risky.
Putin: Russia Has ‘Advantages’ In Bitcoin Mining
Russian President Vladimir Putin this week said the country has distinctive characteristics that allow it to benefit from bitcoin mining while its central bank last week called for a complete ban of the activity in the country as it worries cryptocurrencies could pose risks to its citizens. Putin also asked the Bank of Russia to reach a consensus with the country’s Ministry of Finance, who discouraged a complete prohibition of bitcoin trading and mining in the country, citing how such a move could hurt Russia’s ability to compete in the technology sector. “The Central Bank does not stand in our way of technological progress and makes the necessary efforts to implement the latest technology in this area,” Putin stated in a meeting with members of the Russian government, addressing the divergent opinions held by the government body and the central bank. The central bank’s position in regards to cryptocurrencies is based on worries that “the expansion of this type of activity carries certain risks, and above all for the citizens of the country, given the large volatility and some other components of this topic,” Putin said. “Although, of course, we also have certain competitive advantages here, especially in the so-called mining,” Putin added, referring to the country’s “power surplus” and “well-trained manpower” which could be leveraged for a thriving bitcoin mining industry there.
Brussels Member of Parliament to Take Full 2022 Salary in Bitcoin
Christophe De Beukelaer, a Brussels member of parliament, announced he will take his full 2022 salary in bitcoin to raise awareness about the digital currency in Europe and spark conversations around its usage across different areas of society. “I am the first in Europe, but not in the world, to want to shine the spotlight on cryptocurrencies with such an approach,” De Beukelaer said in a blog post. “I think it’s not too late for Brussels and Belgium to be at the forefront of the cryptocurrency industry. We already have some great companies in the field but it’s time to position ourselves clearly and create a real ecosystem.” A wave of politicians has recently made the headlines with similar announcements, but while most of these pioneers had been from North America, De Beukelaer is taking the initiative to the East. The Brussels deputy said his move intends to wake up Europe to the potential benefits of Bitcoin in the region as the U.S. and Canada have so far led with clear actions to get ahead in terms of adoption.
Biden Administration To Regulate Bitcoin As A Matter Of National Security
The White House wants to set out a cohesive set of policies to regulate Bitcoin and cryptocurrencies as current legislation and its enforcement are scattered across sectors and agencies, according to multiple reports. The Biden administration will release an executive order in the coming weeks to task federal agencies with assessing the risks and opportunities that Bitcoin and cryptocurrencies pose, Bloomberg first reported. The order is set to come under the umbrella of national security efforts as the administration seeks to analyze cryptocurrencies and employ a cohesive regulatory framework that would cover Bitcoin, cryptocurrencies, stablecoins, and NFTs, Barron’s reported. “This is designed to look holistically at digital assets and develop a set of policies that give coherency to what the government is trying to do in this space,” a person familiar with the White House’s plan told Barron’s. Because digital assets don’t stay in one country, it’s necessary to work with other countries on synchronization.” The regulatory efforts would reportedly involve the State Department, Treasury Department, National Economic Council, and Council of Economic Advisers, as well as the White House National Security Council as the administration gauges that cryptocurrencies have “economic implications for national security,” per the Barron’s report.
Bill Introduced To Make Bitcoin A Legal Tender In Arizona
Senator Wendy Rogers has introduced a bill proposing to make bitcoin a legal tender in the U.S. state of Arizona! The bill seeks to add bitcoin to the list of instruments considered legal tender in Arizona and make the peer-to-peer digital currency a lawful medium of exchange there, enabling citizens to pay debts, public charges, taxes, and dues with BTC. If enacted, all financial transactions that are currently done in U.S. dollars could most likely be done in bitcoin in the state, including payments and payouts. Citizens could opt to receive their salaries directly in bitcoin and companies would have complete freedom as to how and when they could use bitcoin. The bill says “Bitcoin” specifically rather than cryptocurrency in general, and doesn’t mention any other digital currency besides the first and only P2P system that managed to trustlessly solve the double-spending problem of digital cash. Arizona could become the first U.S. state to recognize bitcoin as legal tender if the bill moves forward and gets approved. El Salvador in September became the first country in the world to make bitcoin a lawful currency after President Nayib Bukele presented a bill that would equate BTC to U.S. dollars, the other currency with the status of legal tender in the Central American country. Allowing the freedom to transact with and store wealth in an incorruptible form of money that is also more sound than the dollar is a net positive to the state of Arizona and its citizens.
“Coming together is a beginning; keeping together is progress; working together is success.” - Edward Everett Hale on Bitcoin
Stay Safe & Stack Sats!
Bitcoin Adoption News by @CuredSausage
Community
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