Bitcoin sentiment is lately a metric to really keep in mind and today is of extreme fear, according to the Fear and greed index.
The aggregate crypto market capitalization has suffered over $1 trillion in total losses over the past week and bullish participants in this market are now wondering, is there light at the end of the tunnel?
The total cryptocurrency market cap is $1.328 trillion [-12.4%] at the time of writing and over $1.2 trillion has been zapped from the market since the beginning of the sell-off.
A positive outlook on the short term is even with one of largest sell-offs in the history of the asset class potentially still ongoing – the market is more than $1 trillion higher than it was on this date last year.
On May 24th, 2020 the aggregate crypto market capitalization was $256.91 billion. To add some perspective, Bitcoin today, even with this recent pullback, boasts a market capitalization of $623.3 billion.
Bears have the ball
Bears have been in control of price action for the past two weeks now. There was brief hope above $41k after Bitcoin found a recent bottom at $30k. Unfortunately for bulls not enough bullish bids have emerged to this point to push the price back above a key level at $43k.
There are basically 3 important support levels now to keep an eye on as we watch BTC’s short term price action.
The first important line in the sand is $30k which is the local bottom currently and was made just a few days ago. This has been a strong resistance thus far and the price has been range bound between $30k and $41k since that bottom was made.
The second line to watch is $26k which bulls and bears alike will be watching closely.
The third and final support that bulls will cling to is $20k. That support is the former ATH broken December 16, 2020. If $20k is broken, bears will likely sound their trumpets as victorious in the short term, bulls will likely be exhausted at this level.
Bitcoin hit the golden zone Fibonacci retracement on Sunday of 50% and spent considerable time at that level in the afternoon.
Sunday’s daily candle close was $34,834.
Bitcoin is -27.9% for the last 7 days, -42.6% for the last 14 days, -35.1% for the last month, and +269.1% for the last 12 months.
Bitcoin’s Weekly LOW was $30,400 and HIGH was $46,585. The Sunday BTC LOW was $31,280 and the HIGH was $38,274.
BTC’s peak to trough during this drawdown is 53.7%.
Bitcoin dominance is on the rise after putting in what appears to be a bottom at 37% last week. Since hitting 37% BTC dominance has climbed +7.2% and accounts for 44.6% of the aggregate market cap at the time of writing.
Crypto Twitter has been littered with charts making many bullish and bearish cases over the past few days.
Many Bitcoin bulls are putting particular emphasis on the 2016 halving and the fact BTC sold off 372 days after the event.
The most recent BTC sell-off was 373 days after 2020’s block reward halving and bulls are hoping history repeats again with another new all-time high yet forthcoming in 2021 or 2022.