“Extreme fear” when Bitcoin drops below $ 40,000 … and then ricochets

Bitcoin price fell below $ 40,000 for the first time in six weeks.

The decline took place towards the end of the day on September 21, with BTC price falling 16% from nearly $ 47,300 at the start of the day to hit a local low of $ 39,650 around 9 p.m. UTC. The move marks a 25 percent retracement from BTC’s local high of over $ 50,000 on September 7th.

The rebound, however, came after Bitcoin rose more than 80% since it hit $ 29,300 on July 20 and then hit a high in early September.

Bitcoin isn’t the only one to see a sharp drop in prices on September 21, with 29 of the top 30 crypto assets by market capitalization seeing a 24-hour decline, according to CoinGecko.

According to the Crypto Fear & Greed Index, the bearish price movement coincides with the mood of “extreme fear” across the market. Just a month ago, this indicator was signaling “extreme greed”.

Some outspoken critics of cryptocurrencies have started to refuse to make doomsday predictions for the market, with “Mr. Whale ”announced to its 300,000 Twitter followers that“ the bear market is here ”.

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The notorious Goldshill Peter Schiff took part, forecast that the growth of altcoins will soon “overwhelm demand” until the “crypto bubble” pops while Bitfinexed believes China’s real estate giant Evergrande’s credit disaster will threaten Tether’s reserves and broader crypto markets with systemic risk.

The drop in prices also came after SEC chairman Gary Gensler compared stablecoins to poker chips and called for stricter regulation of the sector.

However, the majority of Crypto Twitter reported a decline in buying and selling enthusiasm in response to market moves, with some analysts claiming Bitcoin is ready for a rally if the price stays above local support.

Galaxy Digital CEO Mike Novogratz appeared on CNBC to suggest he won’t feel “concerned” unless BTC doesn’t hold above $ 40,000 and Ether falls below $ 2,800. “As long as this [price levels] hold on, I think the market is in good shape, ”he added.

Novogratz isn’t the only one viewing the $ 40,000 level as a major area of ​​support for BTC, with prominent analyst William Clemente III recently claiming Bitcoin is unlikely to go below $ 39,000 due to a lack of support ”.

Related: Ethereum forms a double top? ETH price loses 12.5% ​​amid fears of Evergrande contagion

Looking at the fourth quarter, influencer Lark Davis noted that the final quarters of 2013 and 2017 were both up more than 300% as past bull cycles increased and about the possibility of Bitcoin Exchange Traded Funds (ETF) being admitted into the market USA speculated could push prices up again.

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