Analysis: Bitcoin price falls, but market sentiment remains positive

Bitcoin started its decline today and is also dragging down many altcoins. Despite today’s losses, the market still seems very confident. Let’s look at the graphs.

What has Bitcoin done in recent weeks?

We’ll start this analysis with the daily chart, where each candle represents 24 hours. Shown here are two important green zones that have influenced price development. As you can see, the lower area (around $37,500) initially served as resistance.

Fortunately, buyers continued to push the price higher and a breakout from this zone occurred. Since then, Bitcoin has respected this level as support. Therefore, this level is likely to be a key support if the price continues to fall.

This decline could occur if Bitcoin falls below the previous low of around $40,400. When the price rose to $45,000 – where BTC now faces resistance – the price fell to that point. From here the route can get up to speed again.

What can we expect?

If Bitcoin falls back to $40,400, it is not surprising that we will continue to fall as we close below this line. However, this level could also ensure further recovery towards the upper green zone. We can see this best on the 4-hour chart, where each candle represents 4 hours.

So there are many levels to keep an eye on. Unfortunately, we cannot say with certainty whether the price will rise or fall. But a lost/won price level often provides a clue.

Less fear

In addition to price developments, there are a number of other factors with which you can analyze Bitcoin. One of these is the Fear and Greed Index. This is an indicator that shows how much fear or greed there is in the market. The higher this indicator, the greater the greed.

Interestingly, market sentiment has hardly changed in recent months. Since the end of October, the indicator has not fallen below 60, but also not above 74. Normally these values ​​fluctuate a little more.

This indicator can provide more clarity about Bitcoin’s price when it reaches a high or low point. It often happens that ‘great greed’ is often accompanied by a climax. This does not have to be the case this time, because we also saw values ​​above 90 – and not even the historical maximum.

However, it is worth remembering that Warren Buffet, one of the most famous investors in the world, said: “We should be fearful when others are greedy, and greedy when others are fearful.”