Over the past few days, bears have managed to wrest the wheel of the proverbial Bitcoin car from bulls. And since then, this class of investors has been driving BTC off a cliff.
As of the time of writing this, Bitcoin is trading at $10,600, having lost 6.54% — around $700 — in the past 24 hours. Coin360 data suggests that BTC is down 10.75% in the past week, marking one of the largest weekly losses during the early phases of this cycle.
This dramatic move lower comes shortly after countless cryptocurrency investors on Twitter were calling for bulls to commence their next leg to the upside.
Bitcoin Market Sentiment Falls Off a Cliff
Despite the fact that the Bitcoin price is still over three times higher than it was back in during the capitulation event of December 15th, market sentiment is currently extremely bearish.
In fact, as first spotted by crypto-friendly economist Alex Krüger, the Bitcoin Fear & Greed index has reached the December lows.
The indicator, which aims to measure how the market is feeling about BTC’s price action, reads an 11 — “extreme fear”.
Are you afraid?
I am not.
(Fear & Greed index currently at the Dec/2018 lows)
— Alex Krüger (@krugermacro) August 14, 2019
While this number may seem entirely arbitrary, especially considering the bullish momentum Bitcoin has experienced in the first half of 2019, the index’s readings are backed by data.
The website that hosts the index claims it analyses a fair mix of volatility, market momentum and volume, social media trends, surveys, dominance, and Google Trends to get the gist of how cryptocurrency investors are faring.
So, to put it short and sweet, the crypto community is just as bearish on BTC as they were in December’s capitulation. With that in mind, is there any chance at Bitcoin bouncing?
Where is BTC Price Going Next?
“The crypto market behavior is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out). Also, people often sell their coins in irrational reaction of seeing red numbers… Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.”
Indeed, the last time the index had such a low reading, Bitcoin bounced higher in the weeks that followed. In fact, when this indicator last flirted in the low 10s, BTC gained 20% in the weeks that followed.
Also, as Crypto Hamster recently noted, this move has resulted in “one of the most oversold moments” for Bitcoin’s four-hour Bollinger Band, implying a near definite “short-term pullback” to the upside.
Even if the cryptocurrency continues to fall, the analyst has suggested that BTC is most likely to bounce in the $9,900 region. He recently pointed out that $9,900 is where the 0.786 Fibonacci Retracement and 1.6 times the 350-day moving average sits, implying that it should act as a strong bounce zone.
— CryptoHamster (@CryptoHamsterIO) August 14, 2019
Also, a Goldman Sachs analyst recently started to eye a “short-term target at $13,971” for BTC. Should the cryptocurrency encounter that level, that would mark a double top, as $14,000 is where Bitcoin reversed in late-June.