Bitcoin has seen some better days but that doesn’t mean cryptocurrency is no longer a viable option. The thing is that the recent downtrend has put it on a downtrend and halfway to the next halving, it is very likely that the market is heading for another extended downtrend. This is certainly the case in the short term given how digital assets have performed lately. Combined with current investor sentiment is a recipe for disaster.
The market turns to fear
The Fear and Greed Index It always helps to give an idea of how investors feel about the market. It is a useful tool that aggregates data across a number of scales and then delivers it on a numbered scale. The gauge has since been in a negative state with the downtrend in the crypto market. However, it has gone from bad to worse as the index now reads severe concerns in terms of investor sentiment.
This is to be expected when offloading cryptocurrencies in such a short time. The market has seen around $200 billion vanish in a single day while major coins such as Bitcoin and Ethereum have fallen continuously.
BTC down to $38k | Source: BTCUSD on TradingView.com
Bitcoin, which earlier regained the place of $40,000, has lost again. Still a strong resistance point with bears continuing to sell off causing the digital assets to drop from this point. If investor sentiment continues to decline and no new money is introduced to the market, bitcoin may retest $35,000 before the weekend ends.
Bitcoin is bearish
In the short term, bitcoin has turned into a very bearish trend. A look at the indicators shows that the price of the cryptocurrency has fallen below the 50-day moving average. For a digital asset like Bitcoin, it is important to stay above this level if there is a short-term recovery.
It has also pulled back from the 5-day moving average which means that the cryptocurrency is set to trade around $38,000 or less in the next couple of days.
Related reading | Ethereum Whale Transactions Rise As Correlation Continues With S&P 500
The next support level also occurs at $37,721. It’s not a historically strong support level for a digital asset, but if the bears give up a bit to sell them, it can definitely hold. However, the next support level for Bitcoin to stop is $37,000. Here, the bulls have stronger control and can prepare for the next resistance.
Moreover, the market should expect significant resistance if Bitcoin attempts to break through $40,000 again. With less money in the market, and investors/traders warning about putting in new money, a breakout above $40,000 is likely only in May.
Featured image from JournalTime, chart from TradingView.com