According to what the fear and greed index shows, fear is back on bitcoin.
In fact, after rising again recently by almost getting to 30 on July 5, it fell again to 20 yesterday, and today it might even fall further.
Bitcoin’s fear and greed index trend
The highest point in recent weeks was touched on June 15, at 38, but still well below parity (i.e., 50).
Note, however, that from late October until mid-May, it had remained almost constantly in positive territory, above 60, for practically seven months in a row, even staying above 80 between late November and mid-January, and then during the middle weeks of February.
That is, in the past few months, enthusiasm had clearly dominated the cryptocurrency markets, probably even in excess.
The index returned to negative territory on May 13, and in almost two months since then, it has still not recovered.
Bitcoin and Ethereum on their way to the upside?
Bitpanda’s Chief Product Officer Lukas Enzersdorfer-Konrad notes that the cryptocurrency market was back in the positive across the board last week after a few weeks of volatility. But the weekend rally was characterized by low trading volumes.
However, bitcoin successfully holds the support level of 25,000, which suggests that the buildup is underway.
Enzersdorfer-Konrad points out that the price is moving within a descending wedge pattern that began forming in mid-June. That is a bullish pattern, but the price needs to break its upper trend line in order to rise.
Another metric is suggesting that accumulation is still ongoing regards the BTCs held by whales. For example, bitcoins held overall on addresses that contain 1,000 to 10,000 BTC have increased by over 80,000 BTC lately, reaching the highest figure since May.
“The renewed accumulation by whales is good news for the market, as wealthy investors are mostly long-term holders, not traders, who are taking short term positions on the market.”
Something similar is also happening to ETH, whose price is moving within a descending wedge formation.
The relative stability of BTC prices and the anticipation of significant protocol updates fuel investors’ appetite for Ethereum, according to Enzersdorfer-Konrad.