The crypto market has seen some intense turbulence throughout the past few days, with Bitcoin firmly guiding most altcoins’ price action over the past few weeks.
BTC’s lackluster price action has caused the market to range sideways throughout the past several weeks. This stability did show some signs of degrading yesterday, although the decline sparked by the benchmark cryptocurrency appeared to be fleeting.
Yesterday’s short-lived plunge was sparked by the crypto’s rejection seen at $10,050 the day before. This was simply the latest in a series of harsh rejections that it has faced at this level throughout the past several days and weeks.
The series of rejections seen within the five-figure price region does appear to have done some notable damage to the sentiment surrounding BTC.
Data shows that investors have growing incredibly fearful over the past few days.
This appears to be correlated to an ongoing slide in Bitcoin’s daily trading volume. These are bearish signs for where BTC trends next.
Bitcoin Investors are Growing Fearful as Consolidation Phase Persists
Bitcoin has been caught within a trading range between $9,300 and $9,900 over the past several weeks.
Overnight, bears did force the crypto below the lower boundary of this trading range, but buyers were able to quickly push it back into the middle of this trading range.
It is important to note that the recent decline was brought about by a sharp influx of selling pressure seen when BTC tapped $10,000.
The rejection here appears to have significantly degraded crypto investors’ sentiment, as the Fear and Greed Index shows a decisive shift towards fearfulness.
Arcane Research spoke about this within a recently released report, explaining that the index is now sitting at its lowest level seen since late-April.
“The Fear & Greed Index dropped back down in the “fear” zone yesterday, as the BTC price took a solid hit. The Index is now at 39, the lowest level since late April…Many investors surely have the brutal drop in March fresh in mind,” they noted.
Arcane does note that some of this uncertainty is due to the stock market’s massive decline yesterday.
BTC Trading Volume Continues Sliding
One trend that clearly shows that this fear is adversely impacting the crypto market is the declining trading volume seen by the benchmark crypto over the past month.
After peaking in mid-May, Bitcoin’s trading volume has been consistently trending downwards over the past several weeks.
Arcane notes that this trend is bearish for the crypto, as it points to underlying weakness amongst buyers.
“The 7-day average real trading volume saw a solid spike last week but has looked weak again this week. Still, yesterday’s volume was high, which is a bearish [sign] as the large price drop occurred on increasing volume.”
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