BTC reacted to US economic indicators on Friday. However, a positive session for the Nasdaq Composite Index supported a late recovery.
Key Insights:
BTC gained 0.85% on Friday, ending the session at $41,686.
A sharp improvement in US consumer sentiment dragged BTC to a session low of $40,290.
On Saturday, investors must consider SEC activity, SEC v crypto case-related news, and BTC-spot ETF-related news.
Bitcoin Visits Sub-$41,000 on Jump in US Consumer Sentiment
BTC gained 0.85% on Friday. Partially reversing a 3.41% slide from Thursday, BTC ended the day at $41,686. Significantly, BTC returned to sub-$41,000 for the second time since December 18.
US Consumer Sentiment Unexpectedly Spiked in January
On Friday, US consumer sentiment numbers for January surprised the markets. The Michigan Consumer Sentiment Index increased from 69.7 to 78.8 in January. Investors reduced bets on a March Fed rate cut this week, testing buyer demand for BTC.
According to the CME FedWatch Tool, the chances of a March Fed rate cut declined from 76.9% to 48.1% over the week.
However, BTC tracked the Nasdaq Composite Index through the session, ending the day with gains. On Friday, the Nasdaq Composite Index rose by 1.70%.
BTC-Spot ETF Trading Volumes Begin Recovery
BTC-spot ETFs remained a focal point for investors on Friday. Trading volumes continued to recover after a significant decline on Day 3 of BTC-spot ETF trading.
Bloomberg Intelligence ETF Analyst Eric Balchunas provided trading volumes for day six for the nine approved BTC-spot ETFs, the Nine. Significantly, the Fidelity Wise Origin Bitcoin Trust (FBTC) moved ahead of iShares Bitcoin Trust (IBIT) for the first time since launch.
Balchunas put the BTC-spot ETF trading volumes into perspective, saying,
“For context, as a group the Nine’s $1.2b in daily volume puts them in Top 1% of all ETFs (w/ $GBTC as well). But even if you single them out, $FBTC & $IBIT each in Top 2%. Keep in mind the avg age of ETFs in Top 2% is prob like 14yrs old. So pretty wild to get there in a week.”
Bitcoin Fear & Greed Remains Neutral
The Bitcoin Fear & Greed Index increased from 51 to 52 on Saturday. Significantly, the Index remained in the Neutral zone, signaling near-term uncertainty.
A move toward the Greed zone would send bullish signals. SEC regulatory scrutiny and US lawmaker chatter continue influencing buyer appetite for cryptos. However, easing bets on a March Fed rate hike could also impact near-term BTC price trends.
Bitcoin Analysis
BTC remained below the 50-day EMA while sitting above the 200-day EMA. The EMAs affirm bearish near-term but bullish longer-term price signals.
A BTC breakout from the 50-day EMA would support a move to the $42,968 resistance level.
On Saturday, SEC-related activity and BTC-spot ETF-related updates need consideration.
However, a drop below the Friday low of $40,290 would bring the $39,861 support level into play.
The 14-Daily RSI reading, 43.07, indicates a BTC fall to the $39,861 support level before entering oversold territory
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