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Tuesday, January 31, 2023

‘Extreme fear’ grips Bitcoin price, but analysts point to signs of a potential reversal

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The cryptocurrency market settled into a holding sample on May 25 after merchants opted to sit on the sidelines forward of the noon Federal Open Market Committee (FOMC) assembly the place the Federal Reserve signaled that it intends to proceed on its path of elevating rates of interest. According to data from Alternative.me, the Fear and Greed Index seeing its longest run of excessive concern because the market crash in Mach 2020.

Crypto Fear & Greed Index. Source: Alternative

Data from Cointelegraph Markets Pro and TradingView exhibits that the worth motion for Bitcoin (BTC) has continued to compress into an more and more slim buying and selling vary, but technical evaluation indicators aren’t offering a lot perception on what path a attainable breakout might take.

BTC/USDT 1-day chart. Source: TradingView

Here’s a have a look at what analysts assume might come subsequent for Bitcoin value.

Whales accumulate as Bitcoin battles to reclaim $30,000

BTC/USDT 15-minute chart. Source: Twitter

According to market analyst Michaël van de Poppe, “#Bitcoin broke by $29.4K and ran in the direction of the subsequent resistance zone. If we maintain $29.4K, we’ll be good in the direction of $32.8K. Finally.”

One attention-grabbing factor to word at these value ranges is that whereas the predominant sentiment is that of excessive concern, on-chain intelligence agency Santiment pointed out that whale wallets have taken this as a chance to accumulate some well-priced BTC.

Bitcoin value vs. provide distribution. Source: Santiment

Santiment mentioned,

“As #Bitcoin continues treading water at $29.6K, the amount of key whale addresses (holding 100 to 1k $BTC) continues rising after the massive dumping from late January. We’ve historically seen a correlation between price & this tier’s address quantity.”

Price might nonetheless pull again to $22,500

A macro perspective on how Bitcoin performs following the looks of a loss of life cross was supplied by pseudonymous Twitter consumer Rekt Capital, who posted the next chart outlining what to anticipate if the “historical price tendencies relating to the #BTC Death Cross repeat […]”

BTC/USD 1-week chart. Source: Twitter

Rekt Capital mentioned,

$BTC will breakdown from the Macro Range Low support & continue its drop to complete -43% downside. The -43% mark is confluent with the 200-Week MA at ~$22500.”

Related: Scott Minerd says Bitcoin price will drop to $8K, but technical analysis says otherwise

“A pivotal retest”

The significance of the present value degree for Bitcoin was touched upon by economist Caleb Franzen, who posted the next chart wanting on the long-term efficiency of BTC versus its weekly anchored volume-weighted common value (AVWAP) noting that “This is a pivotal retest, similar to the dynamics in March 2022.”

BTC/USD vs AVWAP 1-week chart. Source: Twitter

Franzen mentioned,

“A rebound on the weekly AVWAP from the COVID low could increase bullish probabilities. A breakdown below it would drastically increase bearish probabilities, foreshadowing a retest of the grey range, $13.8k-19.8k.”

The general cryptocurrency market cap now stands at $1.265 trillion and Bitcoin’s dominance fee is 44.8%.

The views and opinions expressed listed below are solely these of the creator and don’t essentially mirror the views of Cointelegraph.com. Every funding and buying and selling transfer entails threat, you must conduct your individual analysis when making a resolution.