Market Sentiment Returns to “Fear” as Bitcoin Drops Below $42K

Bitcoin tended to retest $40k on Feb. 12 as price action confirmed analysts’ predictions.

BTC/USD Chart 1 hour | Source: TradingView

Traders hope Bitcoin will be avoided level close “ugly” week

Data from TradingView shows BTC hitting a local low of $41,741 on Saturday before recovering above $42k.

The price move changed direction ended the crypto king’s rally after the US CPI data emerged and early predictions for a return to $40k or even lower to see the bulls’ resolve. really like.

For analyst Michaël van de Poppe, there are no final results yet, but caution is certainly needed going forward when trading on short timeframes.

“Bitcoin is still seeing the same resistance. Weekly order block strongly rejected. The weekly candle is starting to look ugly + many people are scared in the market in the coming weeks. Still flat at this stage,” he summarizes along with a chart showing potential support and resistance targets.

BTC/USD 1-week chart | Source: Michael van de Poppe

Meanwhile, others speculated on the potential range of a long-term downside move.

“For those who are waiting for BTC to get back under $30k, say goodbye because the odds are zero.”

Even at current levels, Bitcoin’s weekly close is practically the same as it was last, thus retaining most of its previous gains that took it out of the $30k region.

Back to region “fear”

However, this weekend’s drop has not been convincing enough to give crypto market sentiment a fresh boost.

According to the Crypto Fear & Greed Index, the sentiment of traders operated in the “neutral” territory for 3 days before returning to the “fear” zone.

On Saturday, the index measured 44/100, then 54/100 on Wednesday.

Cryptocurrency Fear & Greed Index | Source: alternative.me

Discussing January’s weeklong trip into the “extreme fear” bottom, trading platform Decentrader argues that the sentiment reset could be based on historical patterns.

“Such a prolonged period of extreme fear provides a sign that market participants as a whole may have left. We’ve seen that happen at a rate as fast as BTC’s over the past two weeks,” the analysts wrote in a note. updates Market is released on Friday.