After the Ethereum Merge, the crypto market was once again able to rise above $1 trillion. This has resulted in more positive market sentiment from investors, causing the Fear & Greed Index to move clear of the extreme fear territory. These sentiment spikes can be good news for digital assets.
Index Moves Into Fear
Now, even with the positive movement in sentiment, the crypto Fear & Greed Index continues to remain in the fear territory. However, it is a welcome development from last week’s close of 22. Current score is 34. It shows that investors have a significantly different view of this market than they did last week.
However, market sentiment remains below last month. Market sentiment was quite positive in August. Ethereum and bitcoin reached $25,000 while Ethereum hit $2,000. In the end, the Fear & Greed Index had moved into a neutral 47, the highest it had been in four months.
Market sentiment is likely to revert back to extremism following Tuesday’s developments. After the CPI data was released, it showed that the cryptocurrency market had a poor reaction.
Market cap below $1 trillion| Source: Crypto Total Market Cap chart from TradingView.com
Bitcoin’s price had dropped sharply from the mid-$22,000s to below $22,000, losing more than $1,000 in a matter of minutes. The cryptocurrency market cap fell by more than $40 Billion dollars, but it still holds above $1 Trillion.
Is the Crypto Market on the Verge of Recovery?
Unfortunately, the cryptocurrency market has been suffering due to a mix of abrupt increases and bad news. The market was expected to correct, however the CPI data had caused it to fall further than predicted.
But bitcoin is still showing support at just over $20,000. Bitcoin continues to show support just above $20,000. If that level holds, then it’s likely there will be another sharp rise leading to a market recovery. This is largely dependent on the digital asset’s ability to continue to hold the $20,000-$20,800. A failure to hold will likely see bitcoin’s price back down below $20,000. It is possible that bitcoin’s price will fall below $20,000. If the hold, however, it could rise above $22,000
Bitcoin trades currently at $20,900, down 6.08% from the previous 24 hours.
Featured Image from Bitcoinist. Chart from TradingView.com
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