Bitcoin’s (BTC) recent plunge under $8,000 to tap $6,800 has done numbers of the sentiment in the cryptocurrency industry. As a popular trader, Crypto Michael, noted in a recent tweet, the Bitcoin Fear & Greed Index recently printed a 23, which is on the “extreme fear” side of the oscillating indicator.
I like extreme fear. pic.twitter.com/qCQOghIEmH
— Crypto Michaël (@CryptoMichNL) November 23, 2019
The reading of 23, and thus “extreme fear,” are relevant because many believe that emotions drive markets, especially the cryptocurrency market. As analyst RektCapital wrote in a recent blog post:
“Human psychology tends to be predictably irrational because many people tend to react similarly in certain contexts… Baron Rothschild made a fortune by buying when others sold in panic. His philosophy was to ‘Buy when there’s blood in the streets.’ Because the greater the fear — the larger the opportunity for profit.
With that in mind, is there any chance at Bitcoin bouncing?
Related Reading | Uncommon Bitcoin Metric Suggests Massive Profit Taking Is Underway
Will Bitcoin Bottom?
According to a number of analysts, for sure.
An analyst that goes by “Salsa” noted that Bitcoin and Ethereum’s three-day charts printed the same extremely bullish candle pattern: a swing failure pattern “below major liquidity pools on the three-day time frame.” He noted that this contributes to the idea that BTC “bottomed on a macro scale.”
/3 $ETH and $BTC closed as bullish SFPs below MAJOR liquidity pools on D3 time frame. This week will be interesting, CME Monthly close Friday ?. Still think there is a decent chance we're bottoming on macro scale. Fully invested again on spot exposure, will scalp till CME close. pic.twitter.com/lAo5xQkvRF
— SalsaTekila (@SalsaTekila) November 24, 2019
Also, Dave the Wave, an analyst who called the drop to $6,700 months and months ago, said that there is a confluence of technical factors that suggest a long-term bottom was put in at $6,700.
This confluence includes but isn’t limited to the three-year moving average—which currently sits in the low-$6,000s—is where BTC historically has found support in early bull markets and the fact that the cryptocurrency has bounced off the 0.5 Fibonacci Retracement level of the $3,200 to $13,800 range, implying bottoming price action.
Related Reading | Bitcoin Market Cycle: Is This Complacency, Or A New Hope?
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