Since the beginning of this month, Bitcoin has witnessed robust bearish pressure, hindering the flagship asset from undergoing another major rally. After falling below the $80,000 mark, BTC has started to recover again, trading above the $85,000 level. As a result, investors’ sentiment has started to build up toward a more neutral zone.
A Change In Bitcoin’s Market Sentiment
With Bitcoin’s renewed upward movement gaining traction, several metrics are beginning to show positive developments. Investor sentiment has also improved, painting a bullish outlook for BTC’s market dynamics.
Axel Adler Jr., a seasoned on-chain expert and macro researcher has outlined a notable advancement in the Bitcoin Fear and Greed Index as it shows signs of stabilization. The Fear and Greed Index is a technical tool that measures the overall sentiment of the BTC market, using a variety of combined data sources to create a single figure.
This change in the index implies that investor sentiment is progressively improving, possibly reducing current selling pressure and providing a more stable trading environment. The shift coinciding with BTC’s present consolidation might spark fresh bullish momentum. Meanwhile, persistent uncertainty in the market is likely to keep traders cautious in the near future.
According to the macro researcher, the 90-day (quarterly) Bitcoin Fear and Greed Index has dropped by about 22 percentage points over the last two months, migrating from the Extreme Greed zone to more moderate levels.
In the event that the index drops another 10 to 15 points in the short term, the market may completely cool off. Thus emotional fluctuations might lessen and players would become used to negative factors. However, it might take 4 to 6 weeks for the crucial index to decline by another 10 to 15 points at the current rate.
While the 90-day Bitcoin Fear and Greed Index is shifting to more moderate levels, the 30-day (monthly) moving average is already creating a local bottom. This is similar to how the last slump ended when BTC’s price fell to the $54,000 zone.
Has BTC’s Current Correction Reached An End?
It is worth noting that after marking a low of $54,000, BTC witnessed a significant rally of over 107% to its current all-time high of $109,400. Looking at BTC’s recent price action, Mags, a crypto analyst expects a similar development to occur as the flagship asset marks a new low of $76,600.
However, this anticipated price surge hinges on a critical Relative Strength Index (RSI) support level of 45. Should this RSI support hold, Mags foresee a 64% upswing from the position if it only returns to the declining trendline.
Additionally, the move, which corresponds with the 1.618 Fibonacci extension level, will bring BTC’s price to the $128,000 level, marking a new milestone and an all-time high for the asset.
