The negative mood deepens in the crypto, because the recovery may not last

The negative mood deepens in the crypto, because the recovery may not last

The negative mood in the crypto market has been on the rise in recent months. This comes after a market crash that led to the fall of the best coins such as Bitcoin and Ethereum to a one-year low. This has resulted in some of the lowest readings the Fear and Greed Index has published lately and this seems to be just beginning as the negative mood has now reached its annual low.

Crypto market in extreme fear

As with any declining market, investor sentiment has deteriorated. Indicators show that the market is now in extreme fear, which means that investors are cautious when it comes to playing in space. This has been the case for some time, but recent readings have given Crypto index of fear and greed show that it is worse than expected.

The index currently shows a score of 10, one of the lowest levels in six months. The last time the index was so low was in January, when the market was still shaking since the fall on December 4. What followed was a prolonged period of decline, similar to what has been happening in the market in recent weeks.

Related Reading | Fraudulent traders remain silent as Bitcoin struggles to keep $ 30,000

This negative feeling continues to intensify even after recovery. Currently, the price of bitcoin has returned above $ 30,000, and Ethereum continues to weigh in at $ 2,000, but this has not caused any change in investor sentiment. Pointing out that sentiment does not follow the movement of the market as strongly as it used to and that it is pretty much sticking to where investors believe the market is going.

Total crypto market trending $1.25 trillion | Source: Crypto Total Market Cap on TradingView.com

Recovery not strong enough?

The recovery recorded in the early hours of Monday morning is welcome. However, it is debatable whether this recovery will take time. This is because bears have had a stronger market position since then compared to bulls, making the market prone to sudden declines.

Looking at the indicators for Bitcoin, which is the driver of the market, it continues to trade below the 50-day moving average despite the recovery. It remains a retailer market with such indicators, especially given where the next level of support for digital assets is.

Related Reading | Ethereum’s profitability falls to a 2-year low as the price adjusts below $ 2,000

For BTC, adequate support is present only at the level of $ 28,108. This means that any decline will now lead to the collapse of digital assets through weekly gains and return to pre-weekend levels. It also doesn’t help that the indicators indicate sales from all angles.

In order to maintain the current recovery trend, there will need to be a large inflow of funds to the market. Even at oversold levels, various cryptocurrencies remain prone to further declines, unless customers cannot increase their activity enough to halt the declining trend.

Featured image from Phemex, chart from TradingView.com

Disclaimer: The following text represents the views of the authors and does not necessarily reflect the views of Bitcoinists. Bitcoinist is equally an advocate of creative and financial freedom.

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