Bitcoin is currently amid choppy trading conditions, indicating uncertainty among traders due to persistent macroeconomic and geopolitical risks. Fear and greed usually precede positive returns in the short term, but changes in market sentiment can create a bearish environment.
Some analysts believe the price of Bitcoin (BTC) might reach levels only expected in science fiction movies or the metaverse. However, it is relevant to remember that the same happened in the early days of the crypto universe. Investors never imagined that the value of BTC would reach USD 69,000, appreciating by 10,000% in 10 years.
Jason Pizzino, a renowned Australian cryptocurrency analyst, has put the substantial improvement of the crypto asset on the table. Although many consider 25x an exaggeration, he recalled there was a 22x return since 2018 until its current all-time high. For that reason, he thinks it is not too far from the point, as it may not take much longer than people expect.
Bitcoin is currently at the midpoint of a three-month price range amid choppy trading conditions. That indicates uncertainty among traders due to persistent macroeconomic and geopolitical risks.
The growing correlation between BTC and stocks implies that investors are more sensitive to the impact of rising interest rates on asset values. That could lead to lower market yields than the previous two years of unprecedented monetary and fiscal stimulus.
The Bitcoin market has suffered drops of just over 1.12% over the last week and of around 8.76% in the past month. Those declines become more complex at the semi-annual level, 34.5%, while BTC has dropped by 15.8% so far this year.
The market capitalization of Bitcoin is about USD 754.78 billion, which places it 9th in the asset ranking behind Tesla and ahead of Berkshire Hathaway. Meanwhile, its dominance among all cryptocurrencies accounts for 41% of the total.
Rapid Changes in Market Sentiment Can Create a Bearish Environment
After a week of sideways moves in Bitcoin, the fear and greed indicator shows that the former sentiment has reached extreme levels.
Alejandro Zala, Country Manager of Bitpanda in Spain, considers that those sentiments usually precede positive returns in the short term. However, Bitcoin and other cryptocurrencies have shown that market sentiment can change rapidly, creating a bearish environment.
The expert highlights a strong correlation with US equities, while Bitcoin remains within the ascending pattern of a low-momentum move. Over the last week, the correlation coefficient for Bitcoin and US equities approached 0.90, with 1 being the perfect correlation.
Zala also explained that the 50-week moving average continues to decline slowly and serves as the first resistance line. Momentum indicators are mainly flat and move toward a neutral area, showing investor indecision. Amid high uncertainty and despite the shape of the pattern, the breakout direction is unclear.
Concerning the technical analysis, premium indicators show that the total score of the crypto asset dropped to 3 out of 10. For that reason, Bitcoin follows a downward trend and has a decreasing trading volume in the medium and long term. Meanwhile, its amplitude range and the price volatility seem to decrease in both aspects.
By Alexander Salazar
