Crypto Fear and Greed Index Taps Low at ‘Extreme Fear,’ BTC Technicals Point to Uncertainty – Market Updates Bitcoin News
Crypto Fear and Greed Index Taps Low at ‘Extreme Fear,’ BTC Technicals Point to Uncertainty
On Wednesday, following the drop below the $30,000 region, bitcoin’s price has rebounded more than 8% since Tuesday’s low. Meanwhile, the sentiment metric recorded by the Crypto Fear and Greed Index (CFGI) is extremely low, pointing to “extreme fear” in the market. Despite being a scary term, the time is usually the best time to obtain assets for a lower price. However, data from Tradingview’s technicals show bitcoin is still in the “sell” range, while bitcoin market oscillators are more “neutral.”
CFGI Sentiment Metric Reaches ‘Extreme Fear’
The price of bitcoin (BTC) tapped a low of $29,300 on July 20, 2021, and since then the price has managed to jump back above the $32,000 handle. Despite the rebound, there’s a lot of uncertainty within the crypto space as far as short-term bitcoin price predictions are concerned.
Some believe the price may plunge to the $20,000 zone again and others believe a rebound is in the cards and the next trajectory will be well above the $64K all-time high. Most traders who believe this rebound could happen, think that today’s bitcoin price movements are eerily similar to the prices BTC saw in 2013. At that time, BTC plunged to $50 per coin after skyrocketing well above the $200 handle in mid-May 2013.
Bitcoin’s price then jumped close to 2,400% after the summer 2013 low, and surged to the crypto asset’s first four-digit USD all-time high. After BTC dropped to $29,300 on Tuesday, the Crypto Fear and Greed Index (CFGI) tapped a low of ten on the charts. The score of ten is not the lowest point the CFGI metric has recorded but it is very low in comparison to most days. The last time the CFGI metric recorded a ten was in mid-June and at the end of May as well. Since the end of May, the CFGI metric hasn’t been this low in over a year as the last time the CFGI hit a ten or lower was during the March 12, 2020 market rout, otherwise known as ‘Black Thursday.’
While the extreme fear sentiment may seem dismal, traders believe it is one of the best entry points to get into any market. A market filled with panic sellers and “extreme fear” is sure to see cheaper assets than one filled with “extreme greed,” which is the highest end of the CFGI spectrum. Essentially the CFGI analyzes “emotions and sentiments from different sources and crunches them into one simple number,” the website details.
Oscillators and Moving Averages Tell a Similar Story
In contrast to the CFGI, Tradingview’s BTC/USD technicals show a similar story but some of the indicators can be perceived as a different outlook. A single-day summary of Tradingview’s BTC/USD technicals shows a scale toward the “sell” range.
Moving averages (MA) are different and Tradingview’s MA technicals point to the “strong sell” range. Alongside this, BTC/USD oscillators are a bit warmer and are indicating a “neutral” range. For instance, the relative strength index (RSI 14) shows “neutral” and stochastic (14, 3, 3) also indicates things are “neutral.”
All the moving average indicators suggest the “sell” range while the simple moving average (SMA 10) and the exponential moving average (EMA 10) are in the “buy” range. As far as BTC/USD oscillators, the only signal for “buy” is the momentum indicator but the moving average convergence divergence (MACD), a trend that follows momentum, is recorded as a “sell” on Wednesday.
Delta Exchange CEO Says ‘$30K Has Proven to Be Reliable Support Since May’
Meanwhile, despite the plunge on Tuesday morning, bitcoin (BTC) continues to hold a support zone. In a note sent to Bitcoin.com News, Delta Exchange CEO Pankaj Balani explains the current support, at least so far, has been reliable.
“Bitcoin has been grinding lower since the start of this month,” Balani said. “Volatility has compressed significantly with a lower range. Bitcoin is trading in a significant support zone of $29 – $31K USDT. $30K has proven to be very reliable support since May. A breakdown of this level is likely to result in a significant increase in volatility and a final capitulation of crypto assets. That said, BTC is still in the $30K – $40K rectangle until a conclusive breakdown takes place,” the Delta Exchange executive added.
What do you think about bitcoin’s CFGI metric tapping “extreme fear” and the technicals from today’s Tradingview stats? Do you agree with Pankaj Balani’s reliable support comment? Let us know what you think about this subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Crypto investors are in extreme fear shows index
Bitcoin bounced back quite strongly yesterday in the anticipation of what Elon will say in “The B-word” event. After falling below $30,000, it was important that Bitcoin reclaims the support and goes up again. But even though it is currently trading at $32k, the indicators are not very bullish. In fact, crypto investors are still in “extreme fear”, shows the fear and greed index. So, if you are thinking about taking a long position, then wait for a while.
Extreme panic and fear in the market
There has been a strong upbound in the crypto market, but the greed is extremely low, and fear is very high. People still aren’t completely bullish, nor are the markets. This fear could make the price go to $20,000 yet again, so it is important to tread with caution here. It is difficult to say that where the final low of Bitcoin will be. Some say it is at $28k and will not go below that, while others believe it could be much lower.
Every upper movement could be a big possibility of a fakeout to grab investors. But previous patterns show that there is definitely a chance that Bitcoin could make a new high from here on. As of now, the market fear is at 10, which is very high, and it seems to be a good time to buy. As Warren Buffet says that investors should be “fearful when others are greedy, and greedy when others are fearful.” But do not invest all your funds keep something that you can average your buy price with if the price falls.
What do I think?
I am a strong hodler and I haven’t sold any of my alts or Bitcoin since the crash. There is a very good chance that the tokens will rise again and like people are panic selling now they will FOMO back in. So, there is nothing much to think about. If you don’t have an entry then observe the market. And if you have entered at a higher price try to follow dollar-cost averaging to make profits faster. All in all, I am personally invested and you can be too. Do note this is my personal opinion and not financial advice.
What are your thoughts on the extreme fear among crypto investors? And do you think that they will overcome this and take BTC to a new ATH? Let us know in the comments below. Also, if you found our content informative do like and share it with your friends.
Also Read: Ethereum developer arrested for opening his Coinbase account
Bitcoin Price Dips Below $30K as Extreme Fear Grips the Crypto Market
Bitcoin Price Dips Below $30K as Extreme Fear Grips the Crypto Market
The BTC price crashed below the $30K support on July 20, as the Crypto Fear & Greed Index fell to 19/100, denoting extreme fear from market participants. The traditional markets shared a similar fate, with the DOW, S&P 500, and NASDAQ also registering heavy losses on the day.
Panic Selling Ensues
The current bearish sentiment in the crypto and traditional markets comes as Covid-19 cases surge across the world, leading to a pullback in the global economy. As a result, panic selling has gripped the market, leading to $135M worth of BTC being liquidated in an hour, per Bybt analytics data shared by Wu Blockchain.
Following a night of jittery price action that saw bitcoin lose crucial support, respected trader Michaël van de Poppe expressed concerns that the price could fall a lot further. He tweeted:
Rejects $32.3K, Rejects $31K, and now at the next support zone. No real run of volume yet, through which the liquidity tap should still happen or we’ll see a test at $24K for #Bitcoin. pic.twitter.com/wAHUNFV3aF — Michaël van de Poppe (@CryptoMichNL) July 20, 2021
The market-wide sell-off that has dragged on since May is causing institutional investment in bitcoin to evaporate, further compounding losses.
The decline in interest from big-money investors is evidenced by a decrease in the Grayscale Bitcoin Trust market price (GBTC). Glassnode data also flagged the most significant net outflow from the Purpose ETF since mid-May, further confirming the muted activity from institutional players.
On-chain Data Hints at Ongoing Accumulation
According to the latest Glassnode on-chain report, large investors may be steadily accumulating BTC despite the current carnage in the market. The analytics firm pointed to a sharp decline in the BTC reserves of top trading platforms, with $1 billion worth of coins leaving exchanges every month.
The theory that whales are actively buying the dip was confirmed by Lex Moskovski, the CIO of asset management firm Moskovski Capital. He tweeted that whales have so far accumulated nearly $1.7 billion worth of coins.
#Bitcoin supply held by whales (1k-10k wallets) has erased the whole Tesla/China sell-off and are back to the levels of $57k BTC. Whales are unironically accumulating. pic.twitter.com/Rqbd22EvBl — Lex Moskovski (@mskvsk) July 19, 2021
On the other hand, CryptoQuant data shows that miners are selling their bitcoin stashes, likely to cover the enormous expenses incurred during the ongoing mass exodus from China.
ETH Breaks Key Support
The ETH price is down over 6% after gaining bearish momentum over the last 24 hours, per data from Coinmarketcap. The top altcoin traded below the $1,850 support zone and extended losses as bears controlled the price action.
Analyst Rekt Capital tweeted that Ether had lost this year’s Higher Low trendline of $1,819, indicating that the cryptocurrency could be gearing up for more losses in the near term.
The poor performance of other popular digital assets such as BNB, ADA, DOGE, and UNI summed up the grim picture on the crypto market this week. In fact, out of the top 100 cryptocurrencies, only UNUS SED LEO and DASH have shown any notable signs of life over the past 24 hours.