Bitcoin is having a difficult time in recent years. Even with recovery efforts, Bitcoin continues to struggle to maintain above the $20,000 mark. Investor sentiment has fallen to its lowest point in years, reaching new lows after the crash. Even though bitcoin has finally made the desired recovery of above $20,000 it appears that investor sentiment remains in the negative.
Market in Extreme Fear
According to the Crypto Fear & Greed Index, a tool that measures how investors are feeling towards the market, investors are still very wary of the market. The market remains in extreme fear territory at 11 points.
By The Numbers: The Worst Bitcoin Bear Markets Ever| By The Numbers: The Worst Bitcoin Bear Markets Ever
Given the high price of digital assets, this is not surprising. This has led to a significant drop in profitability, which left many investors with large losses. Investor sentiment has been influenced by many events.
Investor sentiment in extreme fear | Source: alternative.me
First was the LUNA market crash, which had wiped out billions of dollars. This was the leading lending protocol at that time. It had stopped withdrawals from banks and transferred funds to investors, effectively preventing thousands of them from accessing their money.
Cryptocurrency is now locked onto multiple platforms so investors have resisted putting money into the market, fearing losing their crypto or being locked to a platform. Inflows to the crypto space have been slowing down as investors wait for improved sentiment.
What’s the Future of Bitcoin?
Bitcoin had fallen as low as $17,600 in its last week’s downtrend. It was lower than its previous peak cycle, which caused investors to fear that it may not have any support. But, it found support and has since recovered to $20,000 above where it rests now.
However, digital assets continue to struggle. This level is difficult to maintain, particularly with bears at $21,000 putting up significant resistance. Some in the industry expect that the value of this digital asset will continue to decline from now on.
BTC rises to $20,000| Source: BTCUSD on TradingView.com
According to the bitcoin halving trend, the cryptocurrency may not recover its former all-time high for at least another year. Historical data suggests that the next bull markets will likely begin in May 2024. This is when the next half-century occurs.
Related Reading| Bitcoin Perpetual Open Interest Suggests Short Squeeze Led To Crash
Bitcoin trades above its 5-day moving median for the first-time since the crash. But, it does not mean that there is a bull trend. It is merely a sign that the market has begun to recover some stability.
Featured Image from Guardian.ng. Chart by TradingView.com
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