The bloody bathing of the crypto market creates most of the fear of the April peak

The bloody bathing of the crypto market creates most of the fear of the April peak

As the declining trend in the crypto market continues, so does the extreme fear. What inspires the sale? Is it Omicron? Or is it Evergrande? Is it a conspiracy? Or are they holidays? For all these questions and more, the Fear and Greed Index has been showing left for a month now. What it means? Where are we going from here? That is what we are here to explore.

Related Reading | Blood on the streets: The crypto market is getting scary as bitcoin jumps

But first, let’s talk about the Index of Fear and Greed. One of the many bitcoin indicators, it measures the general mood of the market at the moment. Zero is extreme fear. Which is extreme greed. And the indicator oscillates between the two at any given time. It is said that the crypto market is very emotional. The index of fear and greed is there to prevent investors from making irrational decisions based only on feelings.

Fear And Greed Index shows Extreme Fear | Source: Arcane Research’s The Weekly Update

What does the Fear and Greed Index say now?

According to Arcane Research Weekly Update, fear has moved into:

For almost a month in a row, the index of fear and greed means “fear” or “extreme fear”. The last time we saw such a long-lasting terrible mood in the market was at the beginning of summer when market sentiment was terrifying for more than two months in a row. With the continuous consolidation of bitcoin, the late autumn euphoria has subsided, and the overall mood at the moment looks very negative. ”

The report also says that, “during stable sales, bitcoin tends to outperform the entire crypto market.” And this time was no exception, BTC “surpassed all indexes so far in December, seeing a negative yield of -18% after a relatively flat second week of trading this month.” On the other hand, the “Small Cap Index lost almost a third of its value in December.” What does that mean in general?

“The dominance of bitcoin has increased by 1.13% in the past week. This is the third time we have seen the bottom of bitcoin dominance at 40% in 2021. The last two were on May 19 and September 13. The 40% threshold seems to be a difficult area for alto maintenance. ”

The bloody bathing of the crypto market creates most of the fear of the April peak

BTC price chart for 12/15/2021 on Eightcap | Source: BTC/USD on TradingView.com

What can we expect in the future?

To get our dose of technical and on-chain analysis, let’s give a microphone to this month Fear & Greed Index Newsletter:

“The main factor here is the cycle support belt. We cannot ignore the fact that Bitcoin has just closed for 2 consecutive weeks below the range of market support. Historically, this has meant that we will see a longer phase of consolidation before we can have a real reversal in the trend. The bottom line is that as long as Bitcoin closes the week below the support cycle range, we shouldn’t expect any major price breakthroughs. ”

Still, every dog ​​has its day. A week ago, analyzing a very similar market sentiment, NewsBTC has informed you:

“The index of ‘fear and greed’ at the levels of extreme fear, according to some analysts, has historically preceded the local bottom of the crypto market. However, the rush to new highs could be an obstacle as the macroeconomic outlook becomes more complex. ”

Related Reading | Bloody bitcoin bathing: Is El Salvador a “news sale” event?

It is also important to recall that only two months ago we were in a similar situation and sentiment had a full 180 in a few weeks.

“The indicator fell to extreme fear on September 30, but in less than two weeks the feeling has returned to extreme greed. The report states that this shows how quickly the mood in the crypto market can change. “

Given this and the disclaimer that this is not financial advice, in a situation like this we can only say one thing … stick to the line!

Featured Image: PublicDomainPictures on Pixabay| Charts by TradingView



Source link

Leave a Reply