- Bitcoin has held quite well as the Dow Jones and Nasdaq 100 slips.
- The fear and greed index has moved to the neutral point.
- The DXY index has risen ahead of the Fed decision.
Bitcoin price drifted upwards on Tuesday as investors focused on the performance of the banking sector and the upcoming interest rate decision by the Federal Reserve. It remained above $28,000 even as the Dow Jones and Nasdaq 100 indices dropped.
VIX and fear and greed index
Bitcoin price held quite well as the VIX index jumped. VIX is an important index that measures volatility in the S&P 500 index. It does that by looking at the 30-day options of the index. The VIX is the best-known measure of volatility in the financial market. It jumped to a high of $19.8, which was ~23% above the lowest point this year.
Meanwhile, the fear and greed index moved to the neutral point of 50, which was lower than Monday’s level of 60. It has remained in this range in the past few days. A key concern among stock investors is the health of the banking sector following the collapse of First Republic Bank.
Most regional bank stocks, including PNC, Citizens, PacWest, and Western Alliance have all plummeted in the past few days. As a result, the SPDR Regional Banking ETF (KRE) stock price has dived by over 13% in the past 5 days. It has fallen by 38% in the past three months.
Read more: How to buy Bitcoin.
The collapse of these banks explains why Bitcoin has held quite well recently. It remains about 70% above its lowest level this year, meaning it has outperformed the S&P 500 and the Nasdaq 100 index. As I wrote on Monday, Bitcoin is now seen as a safe haven as banks implode.
Meanwhile, the US dollar index (DXY) has held quite well in the past few days. It was trading at $101.77, which was higher than the year-to-date low of near $100. It is now waiting for the upcoming interest rate decision by the Federal Reserve scheduled for Wednesday.
Bitcoin price prediction
Turning to the daily chart, we see that the BTC price has been moving sideways in the past few weeks. It is stuck at the 23.6% Fibonacci Retracement level. The coin has also moved above the 50-period exponential moving averages, where it has struggled to move below recently. It has also jumped above the key support point at $25,220, the highest point on February 18 August 13.
Therefore, there is a likelihood that Bitcoin price will have a bullish breakout as buyers target the 38.2% Fibonacci Retracement level at $36,045. This price is about 26% above the current level.
