- Greedy sentiment from last week quickly soured after Bitcoin’s swift price drop.
- The bearish weekly structure showed further lows can’t be ruled out.
Bitcoin [BTC] has fallen by 9.74% from Monday’s swing high at press time. The Crypto Fear and Greed Index, according to CoinMarketCap, was at 56, a neutral reading.
This Index gives an idea about the sentiment in the crypto market.
Source: CoinMarketCap
Extreme fear can be a signal to buy, and extreme greed can be a sell signal. Some sites use factors such as market volatility, momentum, social media, and Bitcoin Dominance to calculate the index values.
The rejection from $70k follows a bearish structure
Source: BTC/USDT on TradingView
On the 1-week chart, a trading session close below $56.5k flipped the market structure bearishly. The rally later in July to $69.5k was unable to climb past the lower high at $72k.
Such a move was required to achieve a bullish market structure break.
Instead, on Monday the 29th of July, the price of Bitcoin swelled to $70.1k before a brutal downturn. Data from Coinglass showed that $343 million worth of liquidations came in just the past 24 hours.
The Fibonacci retracement levels at $56.1k and $52k might be an attractive buying opportunity in the coming weeks. However, as things stand, $52k might be too far south to be tested.
The long-term investor has little to fear from volatility
Source: Blockchain Center
People with a greater investment time horizon would welcome such price drops. Panic creates price bottoms, and a plunge below $60k could be ideal. The Bitcoin Rainbow chart noted that it was within the “still cheap” zone.
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The Crypto Fear and Greed Index was not yet at the extremes below 30 or above 70, meaning that a trend reversal might not be imminent.
The neutral value at press time suggested that more pain might be necessary before a genuine run higher could begin.
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