Market sentiment for crypto is almost at an all-time low. Fear is running through the minds of investors as Bitcoin (BTC) sits on the edge of the precipice. If Bitcoin does make the plunge down to $73,000 it could all be over. Is now the time to sell and get out of the crypto market completely, or could this even be the time to buy?
Extreme fear across all markets
Source: Alternative.me
The Fear and Greed Index is very near the absolute bottom, registering extreme fear for the crypto market. If one takes into account that the same is true for the traditional markets, it can be said that assets are really at rock bottom.
Strong selling continues
The U.S. Spot Bitcoin ETFs coughed up another big net outflow for Wednesday, as 8.51K BTC left the system. This was added to the huge 10.25K BTC sale on Tuesday, and 5.37K BTC on Monday, all of which more than cancelled out the 20K BTC purchase by Strategy last week.
All this said, the traditional markets have not lost any major levels. In fact, the S&P 500 hit the bottom of its 2-year long ascending channel and bounced. The Nasdaq is also holding up well above its more than two year trendline. Granted there is some bearish divergence in both, but it looks as though there could be room for more upside over the course of the rest of this year.
Back to Bitcoin, with sentiment so low, and the price on the brink of the air gap that stretches from $86,000 down to $73,000, could running into the burning building and buying now pay off?
A regained level, or confirmation of the loss?
Source: TradingView
The 4-hour time frame for $BTC shows how the price fell through the ascending trendline, but since then has played with the 0.382 Fibonacci level. The price did even fall through this, and reached as low as $82,300, but the bulls stepped in and got the price back to the 0.382 Fib once again. It now remains to be seen if this will just be a confirmation of the loss of this level, or whether the bulls can regain it and confirm above.
The bull market may not be over yet
Source: TradingView
Nevertheless, it’s when one zooms out into the weekly time frame that a much clearer picture emerges. Instead of drawing the Fibonacci levels from the bottom of the bull flag to the all-time high, if the levels are drawn from the depths of the bear market, it can be seen that the current price is very near the 0.236 Fibonacci level at $87,000. Also, the 0.382, 0.5, and 0.618 Fibonacci levels correspond with important horizontal support levels. If the price does lose the 0.236 level, the 0.382 at $73,400 makes perfect sense as a bounce level.
At the bottom of the chart, the Stochastic RSI for the weekly is at the very bottom. If one looks at this historically, this is where the biggest rallies took off from. The bull market may not be over yet.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
