Bitcoin Fear And Greed Index Falls To ‘Extreme Fear’ As BTC Dips Below $54,000
07 September 2024 - 7:30AM
NEWSBTC
On Friday, the cryptocurrency market’s Fear and Greed Index
plummeted to “extreme fear,” reflecting growing anxiety among
investors as the Bitcoin price dipped to a weekly low of
$53,700. This downturn marks a continuation of a broader
sell-off that has plagued the market, particularly since Bitcoin
struggled to maintain momentum above the critical $60,000
threshold. Bitcoin Targets $53,000 Amid Bearish Sentiment The steep
decline in Bitcoin’s value can be traced back to August’s
significant crash, attributed to challenging macroeconomic
conditions that resulted in increased liquidity exiting risk
assets, including cryptocurrencies. Furthermore, September
has historically been a bearish month for Bitcoin, with an average
negative return of 6%. As of now, just six days into the month,
Bitcoin has already recorded an 8% decline, a trend that market
expert Benjamin Cowen suggests could align with typical September
behavior if the month concludes at this rate. Related Reading:
Here’s How Cardano Price Will ‘Survive’ A US Recession: Crypto
Analyst However, further price retracements could occur if key
support levels fail to hold. Analyst Justin Bennett pointed out
that Bitcoin appears to be heading towards a target of $53,000
after a failed attempt to retest its all-time high of $69,000,
which was achieved at the end of August. Bennett indicated
that while the situation remains fluid, there is potential for a
brief relief rally in the $52,000 to $53,000 range before a deeper
correction could lead the price down to $48,000. Another analyst,
Michael van de Poppe, has also weighed in on the current market
dynamics, stating that the market may have overreached by taking
liquidity from above. Van de Poppe anticipates that Bitcoin
will likely test the $53,000 level before any upward movement
occurs. For Bitcoin to regain its footing, van de Poppe emphasizes
the necessity of reclaiming the $56,000 mark following the recent
dip. Key Factors That Could Catalyze BTC’s Price Recovery Despite
this bearish sentiment dominating the market, BTC investor Lark
Davis remains optimistic about the future, suggesting that the next
six months could be pivotal for Bitcoin and the broader market,
regardless of recent price corrections. One of Davis’ key points is
the upcoming fourth quarter, which has historically been a bullish
period for BTC, especially in Halving years. In addition, he
highlights the rising M2 money supply, which could lead to more
capital being injected into the market, further fueling a potential
rally. Davis also discusses the possibility of rate cuts by the US
Federal Reserve, which analysts suggest could act as a significant
catalyst for BTC’s price. Should the Fed implement cuts of 25 basis
points, it could create a more favorable environment for the entire
crypto market. Related Reading: Shiba Inu Recovery To $0.000081 ATH
Levels Still In Play Another critical factor Davis points to is the
upcoming US election, which is just 60 days away. As reported
by NewsBTC, a potential return of former President Donald Trump
could positively impact the crypto market. Trump has
indicated plans to put BTC at the forefront of his economic agenda,
including loosening regulations and fostering a more supportive
environment for cryptocurrencies. This shift could instill greater
confidence among investors and potentially boost BTC prices
significantly. However, it remains to be seen what the next few
days will bring for the Bitcoin price as the bearish sentiment in
the market is palpable, but with October holding potential gains as
has historically happened in past years. When writing, the
largest cryptocurrency on the market was trading at $54,100.
Featured image from DALL-E, chart from TradingView.com
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