In recent weeks, Bitcoin prices have seen a rebound. Bitcoin prices reclaimed the 25,000 USD barrier just two days back, marking the first recovery since June 13th.
Bitcoin is being used to fund a new rally
Bitcoin experienced its biggest monthly fall since 2011, with a drop of 37.3% in June to an end-of-year value $19,925. It has since partially recovered its value, and it today passed its initial test at $25,000.
Bitcoin still dominates charts, even though it is down 46.5% compared to its prior high. But its dominance has fallen to under 40%, as opposed more than half a year ago.
BTC/USD trades at $24k and below Source: TradingView
Bitcoin’s horizontal fluctuation has been quite peaceful over the last two weeks, oscillating between $22,500 to $24,500. However, the stock market and commodity prices have both seen significant recoveries in recent weeks. The expected summer rally is now taking place in the financial markets.
Since attitude had reached a severe panic state in the middle of June as a result of the financial markets’ steep, month-long decline, perception among participants has greatly improved during the course of the most recent rebound. This is an obvious bear market trend. However, it won’t be known whether and how the bears will return until around mid-September.
Over the previous four weeks, the Crypto Fear & Greed Index has made remarkable progress. But, people are still scared. Seven months on from the catastrophic sell-off, fear still permeates cryptocurrency.
Crypto Fear & Greed Index, as of August 11th, 2022. Source: Lookintobitcoin
It is easy to feel defeated when looking at the larger picture. This setting offers many excellent opportunities for contrarians.
The scared mentality is still the contrarian buying signal.
A sharp fall in the financial market would make it extremely difficult to keep the current administration in power, given that the US will be holding midterm elections in November. Therefore, a September decline of the financial markets would not be as likely. From those lows, the markets may rise until after the American election.
The equity and cryptocurrency markets were under severe pressure since November 2021. However, a wide rebound is now taking place for just over four weeks. This procedure has added over $420 million to the market value of Nasdaq Composite. It is heavily weighted towards technology. According to this, the bear market has officially ended.
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Getty Images, TradingView chart, Lookintobitcoin Featured Image