The crypto market remains extremely fearful as Bitcoin struggles with $20,000
The crypto market has come into conflict since the price of bitcoin had fallen to $20,000. This remains an important technical level for the digital asset because it is just above the previous cycle peak. As such, investors across the universe are watching with bated breath to see if bitcoin will be able to hold this level. This in turn has led to a decline in investor sentiment during this time, causing the Fear & Greed index to plummet.
The crypto index is at 25
The Crypto Fear & Greed Index is an indicator that subtracts a number of metrics to provide an overall score to represent how investors feel about the market. It ranks these across four categories, and currently investor sentiment falls in the lowest of these.
In its latest update, the Fear & Greed index places the market in extreme fear territory with a score of 25. This is after the index had hit a more than a month low of 20, indicating some increase in positive sentiment in recent day.
However, the current score is not so good for the crypto market. With a sentiment like this, investors are wary of putting money into the market, causing panic and leaving the playground to the sellers. This works to push the prices of digital assets in the space down even further.
Bitcoin struggles at $20,000
The $20,000 mark has been one of the most difficult levels to maintain for bitcoin. Volatility always seems to increase when bitcoin is at this point, leading to erratic movements in its price. In this way, the digital asset continues to move above and below $20,000.
Nevertheless, bulls continue to struggle at this level because there is no significant support below this level apart from $17,600. This cycle low, which had plunged below the previous cycle high, puts bitcoin in a dangerous position.
Historical data puts bitcoin at least 80% down from the all-time high for the bottom of the bear market to be in. If the market follows this trend, $17,600 may not be the bottom of the market. Bitcoin is only approx. 70% down from the all-time high as it is now. An 80% draw would make it around $15,000.
However, it is important to keep in mind that bitcoin has broken various historical trends during this cycle. An example is that the price has never fallen below the previous cycle peak, so an extension of this divergence could cause bitcoin to shake off the expected 80% decline.
Featured image from CNBC, chart from TradingView.com
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