- Last week’s greedy sentiment quickly deteriorated following Bitcoin’s rapid price drop.
- The bearish weekly structure showed that further lows cannot be ruled out.
Bitcoin [BTC] is down 9.74% from Monday’s swing high at the time of writing. The Crypto Fear and Greed Indexaccording to CoinMarketCapstood at 56, a neutral value.
This Index gives an idea of the sentiment on the crypto market.
Extreme fear can be a signal to buy, and extreme greed can be a signal to sell. Some sites use factors such as market volatility, momentum, social media and Bitcoin Dominance to calculate the index values.
The $70,000 rejection follows a bearish structure
Source: BTC/USDT on TradingView
On the 1-week chart, a trading session near $56.5k caused a bearish reversal in the market structure. The rally later in July to $69.5k failed to climb past the low high of $72k.
Such a move was necessary to achieve a bullish market structure break.
Instead, Bitcoin’s price rose to $70.1k on Monday, July 29, before a brutal downturn. Dates of Mint glass showed that $343 million in liquidations took place in the last 24 hours.
The Fibonacci retracement levels of $56.1k and $52k could provide an attractive buying opportunity in the coming weeks. As things stand now, however, $52,000 might be too far south to be tested.
The long-term investor has little to fear from volatility
People with a longer investment horizon would welcome such price drops. Panic is creating price floors, and a dip below $60,000 could be ideal. The Bitcoin Rainbow chart noted that it was within the “still cheap” zone.
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The Crypto Fear and Greed Index has not yet reached the extremes below 30 or above 70, meaning a trend reversal may not be imminent.
The neutral reading at the time of writing suggested that more pain might be needed before a true run-higher could begin.