As Bitcoin, Ethereum and other large cryptocurrencies turn critical resistance points into support, the crypto market is moving upwards. ETH’s price currently leads the market recovery as it records a 40% profit in the past seven days trading at $1,500.
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On the other hand, BTC’s price is more conservative but has begun recording important gains. BTC is currently trading at $22,800 and has a 14% profit in the same period. This price could continue to rise.
The bullish momentum has resulted in the Fear and Greed Index moving towards extreme fear levels after a 74-day streak, according to Arcane Research. It is clear that long-term positions are profitable when the Index consolidates near those levels.
Below is a chart showing that Crypto Fear and Greed Index levels have returned to their Q1 2022 levels. In May, Bitcoin’s price fell below $30,000 and the indicator plunged to an all-time low of around $17,000.
Despite current bullish momentum the Index remains in fear territory. This suggests that BTC and ETH are still being held back by the Index. The crypto market must follow suit and regain its Q1 2022 price before other market participants become more optimistic. Arcane Research found the following:
Despite improving sentiment, the Fear and Greed Index is still high in fearful territory. Other viable sentiment indicators from derivatives markets suggest that market participants continue to exercise caution.
This chart suggests that this sector has reached a pivot point, pushing above 30 in Crypto Fear and Greed Index. Breaking above this level could signal a shift in market trends.
How the Crypto Market could seize this window of opportunity
The crypto market may extend its bullish momentum in the near term. BTC/ETH are likely to find mitigation from the factors driving them into yearly lows.
This includes the U.S. Federal Reserve’s (Fed), which is trying to curb inflation by raising interest rates. The financial institution has entered a blackout period, meaning its representatives won’t make public statements until the next Federal Open Market Committee (FOMC) meeting.
According to the Consumer Price Index, inflation is expected to decrease. NewsBTC reports that this indicator experienced a forty-year increase, but may see a decline as copper and oil trend downwards. CPI is heavily dependent on commodity prices.
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According to some reports, the traditional equity market seems to be supporting crypto markets. Since the beginning of the downtrend both sectors have been closely related. Stock bouncing back to earlier levels could be beneficial for BTC and other cryptocurrency.
#StocksKeep going, keep bringing it! #BitcoinWith it. Markets correct between 70 and 90% when you trade the risk. This was in March 2020. A relief rally alone is worth huge profits.
— IncomeSharks (@IncomeSharks) July 19, 2022
