The Fear and Greed index of the ‘crypto king’ bitcoin has now turned into an extreme fear territory by marking its downfall of %4 over the last 24 hours, meanwhile, ETH is down-trending by 6%. In addition to this other cryptos have also underperformed bitcoin suggesting a lower appetite risk among the traders.
Currently, the Global Crypto markets are executing the red zone leading stocks and cryptos to trade at the bottom.
CPI, the U.S Consumer Price Index defined as the most widely used benchmark for inflation, has currently seen a hike by 8.6% on a year-over-year basis in the previous month, triggering the price drop of $500 BTC on the New York trading day.
Whereas the persistent bear sentiment from the last few months has kept some crypto buyers on hold. In addition, BTC’s decline from the resistance level of $33,000 has extended the chances of a Bitcoin rally too.
Bitcoin’s choppy trading range
As a reaction Katie Stockton, the managing partner at Fairlead Strategies wrote in her email:
For Bitcoin, risk now appears heightened from a retest of long-term support around $27,200, noting intermediate and long-term momentum gauges point to more downside.”
Which is currently seen in the choppy trading range by trading at the flat for seven days with the initial support of $25,000. In addition, Bitcoin’s moments on the daily chart have suggested the downturn of bitcoin continuation from November of last year to some future months of 2022. Defining the lower price highs and lower price lows.
Further, the next subsequent support at the 200-week moving average is currently at $22,294, which may even stabilize the price decline at $17,673 a 78% retracement of BTC from its previous uptrend from March 2020 to November 2021. Meanwhile, the selling pressure could also subside in the next few weeks.
The chart above marks out the RSI’s downside reverse to the upside or turning the red shaded areas to gray.
The oversold index of relative strength shows that selling pressure may subside over the next few weeks, whereas the Oversold readings do not indicate a definitive price low, especially within a downtrending context.
Instead, the 14-week RSI can determine the oversold signals tending to a potential trend reversal.