Crypto market falls to extreme fear as Bitcoin struggles to hold $19,000
Sentiment in the crypto market has been on the decline for the past year, and it has come in tandem with the decline in the bitcoin price. Bitcoin, which moves the entire crypto market most times, has been having a rough time lately. Now, as the cutting-edge cryptocurrency continues to struggle to maintain a good value in the market, sentiment has plunged towards 3-month lows.
Market in extreme fear
The crypto market is now entering what is one of the longest fear trends in recent history. In the last six months, there has been no significant improvement in market sentiment. The last time the crypto market came close to going completely out of the fear zone was back in August when there was some recovery in the market.
During this time, the price of bitcoin had seen a rally that put it above $25,000. However, it had stopped just short of entering the green territory and has stayed down ever since.
For three months now, market sentiment has been muted and has seen no positive movement. The score for last week came out to 22 which stuck the market in extreme fear territory, also following the same theme for the month of September.
Market sentiment in extreme fear | Source: alternative.com
It was expected that the market would see some improvement in the month of October, but there has not been much green in the market since then. The current market sentiment score is 20, indicating even more decline in investor sentiment.
Bitcoin carries the market
Bitcoin has dominated the crypto market since its inception, although its dominance is now lower than it used to be. Nevertheless, bitcoin price movement still determines market direction most of the time and sets the tone for investor sentiment. Given this, for the crypto market to finally leave the fear zone, there must be an increase in the price of bitcoin.
One thing that comes with negative investor sentiment, however, is the refusal to put money into the market. People are more likely to invest when prices are going up rather than down, even though the latter is a better time to enter the market.
BTC fails to reclaim $20,000 | Source: BTCUSD on TradingView.com
Bitcoin’s current price does not inspire confidence in the hearts of investors, hence the reluctance for investors to want to buy cryptocurrencies. To do so, the price of the digital asset would have to cross $20,000 again, which is currently not in the cards given that the cryptocurrency is trading below its 50-day moving average.
Bears are already raising significant resistance at $19,600, and given the constant selling pressure on BTC, it is likely that the price of bitcoin will return to $19,000 before testing the $19,600 resistance. But a successful test of this resistance level will see BTC target the next significant resistance at $20,200.
Featured image from Genetic Engineering and Biotechnology News, chart from TradingView.com
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