Bitcoin’s recent drop to $25,000, although expected by many, has left traders and investors afraid of taking new positions. Sentiment across the crypto market remains negative, made worse by projections of another dip to $20,000 before BTC price reverses the uptrend significantly.
This lack of active participation which often comes after dips, has confined Bitcoin to hovering at $26,000. Attempts to climb toward $27,000 only made it to $26,282 while on the downside bulls set camp at $25,000 in a bid to avert an extended decline.
BTC Price Bull Runs Start in Extreme Fear
Ardent investors in the crypto market are well aware of the Bitcoin cycles, which are often linked to the halving – set to occur in April 2024. These cycles are characterized by periods of euphoria and fear, which mark the beginning of retracements or bull runs, respectively.
According to @DrProfitCrypto “The last bull run in the end of 2020 started with absolute fear during covid and the mother of all crashes.”
The sell-off triggered by the pandemic set Bitcoin on a parabolic climb to new all-time highs of $69,044.
“Bull markets always start with extreme fear while bear markets always start with euphoria,” the trader and analyst added.
However, what differentiates investors who smile during bull runs and those that buy at the extreme top (euphoria) is timing. Buying during market dips has been proven to be one of the best strategies to build digital assets’ value over time.
However, very few investors have the confidence to buy amid market downtimes like the ongoing rout.
A similar sentiment shared by crypto analytics platform, Santiment reckoned that while “traders are praying that markets fall so they can get discounted Bitcoin, many feel second thoughts when presented with the actual opportunity to buy the dip.”
What’s Next For BTC Price
Bitcoin is on the edge balancing its support at $26,000 amid glaring dips to $20,000. Investors are fearful that these dips will put their funds in jeopardy, especially there not being a guarantee that losses will not stretch beyond $20,000.
The Moving Average Convergence Divergence (MACD) encourages sellers to keep their positions intact as it drops further into the negative region. The sell signal started in early July marked by the MACD line in blue crossing below the signal line in red was reaffirmed last week, hence the sell-off.
If bears keep holding Bitcoin hostage at $26,000, another breakdown will likely follow. Support from the descending trendline as shown on the chart may provide bulls will an opportunity to avoid a more considerable dip to $20,000 in favor of a rebound at $22,000.
Despite the crypto market structure weakening, rebounds tend to occur during some of the most uncertain moments.
That said, the Relative Strength Index (RSI) is hugely oversold at 20, lower than the 2020 Covid crash. Oversold conditions imply that Bitcoin is trading below its actual market price and often culminate in more significant price rebounds. In that case, it is advisable to tread carefully and be ready to make quick decisions as the situation at hand may call for.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: https://coingape.com/btc-price-spreads-fear-at-26k-is-this-the-start-of-the-bull-run/