Bitcoin has been struggling in the recent past and even with a recovery, it is difficult to stay above the $20,000 level. The crash has also been accompanied by a significant drop in investor sentiment, which has hit its lowest level in recent years. And even with Bitcoin finally recovering the iconic above $20,000, it seems that investor sentiment is becoming increasingly difficult to maintain as it remains strongly negative.
market in extreme fear
According to the Crypto Fear and Greed Index, a tool that measures how investors are feeling towards the market, investors are still very wary of the market. The index is currently at a score of 11 which means that the market is still in a zone of extreme fear.
Related Reading | By the Numbers: Worst Bitcoin Bear Market Ever
This should come as no surprise, considering where the leading digital asset price is in the space. Profitability has also fallen during this time period, causing a lot of investors to suffer losses in the market. Apart from this, several events have also played an integral role in raising the investor sentiment to this point.
Investor sentiment in extreme fear | Source: alternative.me
The first was the Luna crash that wiped out billions of dollars from the market. Then major lending protocols halted withdrawals and transfers, essentially preventing thousands of investors from being able to access their funds.
With crypto being locked on multiple platforms, investors are wary of putting any money into the market for fear of losing it or being locked out on the platform. Therefore, the flow in space has slowed significantly, awaiting better perception.
Where is bitcoin going?
Bitcoin fell to $17,600 in last week’s downtrend. It was below the peak of the previous cycle, causing fear among investors that there may be no support. However, the digital asset found support and has since bounced back above $20,000 where it is now resting.
Nevertheless, digital assets continue to struggle. Staying above this level has been a difficult task, especially with the bears forming significant resistance at the $21,000 point. Furthermore, some expect the digital asset price to continue to decline from this month onwards.
BTC recovers above $20,000 | Source: BTCUSD on TradingView.com
Along with the halving trend since bitcoin’s inception, it could take at least another year for the digital asset to reach its previous all-time highs. A look at the historical data suggests that the next bull run may begin in May 2024, when the next halving occurs.
Related Reading | Bitcoin Perpetual Open Interest Indicates Short Squeeze Leads to Crash
Bitcoin is trading above its 5-day moving average for the first time since the crash. However, this does not mean that a bull trend is in progress. Rather, it shows that a certain level of stability is beginning to return to the market.
Featured image from Guardian.ng, chart from TradingView.com
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