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The crypto market sentiment has been on the decline over the last year and it has come in tandem with the decline in bitcoin price. Bitcoin, which moves the entirety of the crypto market most times, has had a tough go of it in recent times. Now, as the pioneer cryptocurrency continues to struggle to hold 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. Over the last six months, there has not been any significant recovery in market sentiment. The last time that the crypto market had come close to completely exiting the fear territory was back in August when there was some recovery in the market.
During this time, the price of bitcoin had seen a run-up that put it above $25,000. However, it had stopped just short of entering the green territory and has remained down since then.
For three months now, market sentiment has remained muted and has not seen any positive movement. The score for last week came out to 22 which put the market firmly in the 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 recovery in the month of October but there hasn’t been much green in the market since then. The present score for the market sentiment is 20, which shows even more decline in investor sentiment.
Bitcoin Carries The Market
Bitcoin has dominated the crypto market since its inception, even though the dominance is now lower than what it used to be. Nevertheless, the bitcoin price movement still determines the market direction most of the time and sets the tone for investor sentiment. Given this, for the crypto market to finally leave the fear territory, there would need to be a surge in the price of bitcoin.
However, one thing that comes with negative investor sentiment is the refusal to put money into the market. People are more likely to invest when prices are going up instead of down even though the latter is a better time to get into the market.
BTC fails to reclaim $20,000 | Source: BTCUSD on TradingView.com
Bitcoin’s current price does not spark confidence in the hearts of investors, hence the reluctance for investors to want to purchase cryptocurrencies. To do so, the price of the digital asset would have to cross $20,000 once more, which is currently not in the cards given that the cryptocurrency is trading below its 50-day moving average.
Bears are already mounting significant resistance at $19,600, and given the constant sell pressure on BTC, it is likely that the price of bitcoin will revisit $19,000 before testing the resistance at $19,600. But a successful test of this resistance level will see BTC aiming for the next significant resistance at $20,200.
Featured image from Genetic Engineering and Biotechnology News, chart from TradingView.com
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