Bitcoin Plunge Below $27,000 Drives Investors Into Fear, Will Rebound Occur?
12 Oktober 2023 - 8:30PM
NEWSBTC
Data shows the Bitcoin drop below the $27,000 level has made most
investors fearful for the first time this month. Bitcoin Fear &
Greed Index Is Pointing At “Fear” Right Now The “fear and greed
index” is an indicator that tells us about the general sentiment
among investors in the Bitcoin and broader cryptocurrency market.
Alternative created the metric, and according to the website, it’s
based on these factors: volatility, trading volume, social media
sentiment, market cap dominance, and Google Trends data. The
indicator uses a numeric scale from zero to hundred to represent
the sentiment. When the index has a value greater than 54, it means
that the average investor is greedy right now, while it being under
46 implies a fearful mentality is dominant. Related Reading:
Bitcoin Finds Rejection At This Historical Line, Bear Market Back
On? The region between these two thresholds naturally signifies a
neutral sentiment among the holders. Until today, the sector had
been stuck inside this region since the last couple of days of
September, as the investors had been split about the trajectory of
Bitcoin. The chart below shows that the market sentiment has
worsened with the latest drop in the cryptocurrency’s price below
the $27,000 level. It looks like the value of the metric has
registered some decline in recent days | Source: Alternative After
this latest drop in sentiment, the fear and greed index has hit a
value of 45, meaning that investor sentiment has just entered the
fear region. The value of the metric seems to be 45 right now |
Source: Alternative Historically, the market has tended to move in
a way that’s opposite to what the majority of the investors
believe. The likelihood of such a contrary move happening increases
as this imbalance in the sentiment rises. While the holders are
leaning towards one side (fear), the imbalance is small, as the
fear and greed index is barely inside the territory. As such, the
probability of a rebound would be pretty high right now (at least
based on the sentiment). Besides the core sentiments discussed
before, there are also two special zones, called “extreme fear” (at
or below values of 25) and “extreme greed” (at or above values of
75). These regions are where the cryptocurrency has often turned
around in the past. Naturally, bottoms have occurred in the former
zone, while tops have formed in the latter area. Related Reading:
Bitcoin Could See A 50% Rise Based On This, Analyst Explains If the
Bitcoin fear and greed index continues declining in the coming days
and reaches values near the extreme fear region, a bounce could
become a real possibility. For now, one sign pointing to the
chances of a rebound may be that the large investors have been
buying recently, as an analyst on X pointed out. The BTC sharks
have increased their holdings recently | Source: @ali_charts on X
Since the start of October, Bitcoin investors holding between 100
and 1,000 coins have purchased a combined 20,000 BTC worth around
$533.6 million at the current exchange rate. BTC Price At the time
of writing, Bitcoin is trading at around $26,700, down almost 5% in
the past week. BTC has experienced some downtrend recently |
Source: BTCUSD on TradingView Featured image from Bastian Riccardi
on Unsplash.com, charts from TradingView.com, Santiment.net
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