Market Sentiment Returns to “Fear” as Bitcoin Plunges Below $42,000
Bitcoin tended to retest $40,000 on Feb. 12 as price action confirmed analysts’ predictions.
BTC/USD chart 1 hour | Source: TradingView
Traders hope Bitcoin is avoided even Close “ugly” week
Data from TradingView shows BTC touching a local low of $41,741 on Saturday before recovering above $42,000.
Price action reversed direction and ended the crypto king’s rally after US CPI data emerged and early predictions for a return to $40,000 or even lower to really see bulls determination.
Analyst Michaël van de Poppe has no definitive results yet, but caution should certainly be exercised when trading on short timeframes going forward.
“Bitcoin still sees the same resistance. Weekly order block strictly rejected. The weekly candle is starting to look ugly + many people are scared in the coming weeks in the market. At this point, it’s still moving sideways,” he said summary along with a chart showing potential support and resistance targets.
BTC/USD 1 week chart | Source: Michael van de Poppe
Meanwhile, others speculated on the potential range of a long-term move lower.
– Credible Crypto (@CredibleCrypto) February 12, 2022
“For those waiting for BTC to get back under $30,000, goodbye because the odds are zero.”
Even at current levels, Bitcoin’s weekly close is pretty much the same as it was last, retaining most of its previous gains that took it out of the $30,000 region.
Back to region “Fear”
However, this weekend’s drop wasn’t convincing enough to give a fresh boost to crypto market sentiment.
According to the Crypto Fear & Greed Index, trader sentiment hovered in “neutral” territory for 3 days before returning to the “fear” zone.
On Saturday the index was 44/100, on Wednesday it was 54/100.
Cryptocurrency Fear & Greed Index | Source: alternative.me
Referring to January’s week-long excursion to the “extreme fear” bottom, trading platform Decentrader argues that the sentiment decline may be based on historical patterns.
“Such a long period of extreme fear is a sign that market participants as a whole may have left. We’ve seen this happen as fast as BTC over the past two weeks,” the analysts wrote in a note. Update The market opens on Friday.
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