Crypto Daily: The crypto market is in a state of extreme fear

Sep 08, 2022
07:09
2 min de lectura

Equipo de Choise.com

According to the latest weekly report from Arcane Research, the market has now observed fearful sentiment for five months without a break.

The “Fear and Greed index” is an indicator that tells us about the general sentiment among investors in the crypto market.

The metric uses a numeric scale that runs from zero to hundred for displaying this sentiment. All values above 50 signify that investors are greedy right now, while those below the threshold suggest a fearful market. End range values of more than 75 and less than 25 represent sentiments of “extreme greed” and “extreme fear,” respectively.

Historically, tops in coins like Bitcoin have formed while the investors have gone through extreme greed, while bottoms have taken place in periods with extreme fear.

According to Arcane Research, the crypto Fear and Greed index had been recovering during July and August, after the market had earlier been under a long spell of extreme fear.

The indicator almost reached greed values during this optimism buildup, but as the latest rally in Bitcoin died down, so did the investor mentality.

The sentiment quickly fell back deep into fear, and the decline has continued now, taking the value of the index to just 22. This means that the sector is now once again experiencing extreme fear.

The report notes that the sentiment has remained in the fearful region since April now, making it a run of five straight months of fear. Since the Fear and Greed index was conceived back in February 2018, this stretch of fear has been the longest such run.

Bitcoin price analysis

Bitcoin price started amajor decline below the key $19,500 support zone. BTCeven traded below the $19,000 level and tested $18,500. A low was formed near $18,550 and the price recently started an upside correction. There was a move above the $19,000 resistance zone. The bulls pushed the price above the 23.6% Fib retracement level of the key drop from the $20,172 swing high to $18,550 low.

However, the bears remained active near the $19,500 resistance zone. There is also a major bearish trend line forming with resistance near $19,310 on the hourly chart of the BTC/USD pair.

Source: BTCUSD on TradingView.com

The next major resistance sits near the $19,500 level. A clear move above the $19,500 resistance might start a steady increase to $20,000. Any more gains might send the price towards the $20,500 resistance zone.

If bitcoin fails to start a recovery wave above the $19,500 zone, it could continue to move down. An immediate support on the downside is near the $19,000 zone. The next major support sits near the $18,550 level. A downside break below the $18,550 support might spark more downsides. In the stated case, the price could drop towards the $18,000 support.

Technical indicators

Hourly MACD – losing pace in the bullish zone

Hourly RSI – above the 50 level

Major Support Levels – $19,000, $18,550

Major Resistance Levels – $19,300, $19,500 and $20,000

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