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Friday the Fear and Greed Index of the cryptocurrency market plummeted to “extreme fear,” reflecting growing concern among investors as the Bitcoin price fell to a weekly low of $53,700.
This downturn marks a continuation of a broader sell-off that has plagued the market, especially as Bitcoin struggled to maintain momentum above the critical $60,000 threshold.
Bitcoin is targeting $53,000 amid bearish sentiment
The steep drop in Bitcoin’s value can be traced back to August’s significant drop crashattributed to challenging macroeconomic conditions that resulted in increased liquidity exiting risky assets including cryptocurrencies.
Furthermore, September is historically a bearish month for Bitcoin, with an average negative return of 6%. As of now, just six days a month, Bitcoin has already recorded an 8% decline, a trend that market expert Benjamin Cowen suggests could align with typical September behavior if the month ends at this pace.
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However, further price moves could occur if key support levels do not hold. Analyst Justin Bennett pointed out that Bitcoin appears to be heading towards a target of $53,000 after a failed attempt to retest its all-time high of $69,000 reached in late August.
Bennett indicated that while the situation remains fluid, there is potential for brief relief collection in the $52,000 to $53,000 range before a deeper correction could take the price to $48,000.
Another analyst, Michael van de Poppe, has also spoken out on the current market dynamics, stating that the market may have gone too far in sourcing liquidity from above.
From de Poppe anticipates that Bitcoin is likely to test the $53,000 level before an upward move occurs. To ensure that Bitcoin regains its footing, Van de Poppe emphasizes the need to regain the $56,000 mark after the recent dip.
Key factors that could catalyze BTC’s price recovery
Despite this bearish sentiment dominating the market, BTC investor Lark Davis remains optimistic about the future. suggestive that the next six months could be crucial for Bitcoin and the broader market, regardless of recent price corrections.
One of Davis’ key points is the upcoming fourth quarter, which has historically been a bullish period for BTC, especially in the half-years. Additionally, he highlights the rising M2 money supply, which could lead to more capital being injected into the market, further fueling a potential rally.
Davis also discusses the possibility of rate cuts by the US Federal Reserve, which analysts suggest could act as a major catalyst BTC price. If the Fed implements cuts of 25 basis points, it could create a more favorable environment for the entire crypto market.
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Another critical factor Davis points out is the upcoming US elections, which are just 60 days away. If According to NewsBTC, a potential return of former President Donald Trump could have a positive impact the crypto market.
Trump has indicated plans to put BTC at the forefront of his policies economic agendaincluding relaxing regulations and promoting a more supportive environment for cryptocurrencies. This shift could instill more confidence among investors and potentially boost BTC prices significantly.
However, it remains to be seen what the coming days will bring for the Bitcoin price as bearish sentiment is palpable in the market, but with October bringing potential gains as has historically happened in recent years.
At the time of writing, the largest cryptocurrency on the market was trading at $54,100.
Featured image of DALL-E, chart from TradingView.com
