Losses dominate crypto this weekend, has the bear market returned?

The crypto market was hit hard over the weekend as prices from Bitcoin to altcoins fell rapidly. During this time, there was also a decline in trading volume and momentum in the market, which was partly responsible for the losses. Now, with the new week, there is still a lot of skepticism in the market as Bitcoin’s fall below $30,000 could mean that the bear market is back in full force.

The Crypto Fear & Greed Index remains neutral

One thing that highlights how investors feel when it comes to the market is the Crypto Fear & Greed Index. This index takes into account things like social media sentiment, market momentum, volatility, etc. and with this it gives a score based on a scale of 1-100.

Now, on this index, 1-25 marks extreme fear, which is when investors are very cautious about the market. 26-50 is the fear range, but with less caution from investors. 51-75 is greed, a region that shows investors are more likely to invest in the market. And finally, 76-100 is extreme greed when the euphoria is the highest in the market, usually seen in bull markets.

However, the 48-52 levels are usually reserved for the “neutral” level, which is where the index currently lies. At this level, investors usually struggle from a price rally or crash, and it shows an unwillingness to make further moves until there is a better defined movement in the market.

Fear & Greed Index returns to neutral | Source: alternative.me

If the index continues to maintain its neutral territory, the crypto market may see prices consolidate for a while until investors are confident enough to start re-entering the market.

Could the bear market be in full bloom?

Currently, the crypto market is still seeing sideways movement rather than a clear upward or downward movement. This only shows a lack of interest in the market right now and not a continuation of the bear trend from 2022.

Total market cap takes a hit during the weekend | Source: Crypto Total Market Cap on TradingView.com

Also, the total crypto market capitalization is still holding above $1 trillion, which is a good sign for the market. Typically, a bear market return would see the total market cap fall below $1 trillion, and this would only happen if BTC were to fall below $20,000 again.

Unless such a market cap is experienced, the current trend only signals a correction from the run-up to $30,000. Also, as long as BTC continues to stay above its 200-day moving average, the bull trend is still maintained on a long-term basis.