Neverending Nightmare Fear Cycle In Crypto Breaks, What Happens Now?
July 19 2022 - 12:18PM
NEWSBTC
The crypto market pushes upwards as Bitcoin, Ethereum, and other
larger cryptocurrencies are turning critical resistance points into
support. ETH’s price currently leads the market recovery as it
records a 40% profit in the past seven days trading at $1,500.
Related Reading | Solana Adds 70% More Shine – Can SOL Keep
The Light Coming? On the other hand, BTC’s price is more
conservative but has begun recording important gains. At the time
of writing, BTC trades at $22,800 with a 14% profit over the same
period and is on track to securing further gains. As a result of
the bullish momentum, the Fear and Greed Index has broken out of
its 74-day streak moving to extreme fear levels, according to a
report from Arcane Research. Again, this confirms the profitability
of taking long positions when this Index consolidates around those
levels. As seen in the chart below, the Crypto Fear and Greed Index
has returned to its Q1 2022 levels. This indicator plummeted in May
when the price of Bitcoin broke below the $30,000 barrier and into
a multi-year low at around $17,500. Despite the current bullish
momentum, the Index is still gravitating in fear territory
suggesting BTC, ETH, and the crypto market will need to follow the
Index and reclaim its Q1 2022 prices before more market
participants turn more optimistic. Arcane Research noted the
following: While the sentiment is improving, the Fear and Greed
Index remains deep in the fearful territory, and other viable
sentiment indicators from the derivatives market suggest that
market participants still exercise caution. The chart above
suggests the sector is at a turning point as it pushes above 30 in
the Crypto Fear and Greed Index. A break above these levels could
confirm a change in the current market trend. Why The Crypto Market
Could Seize This Window Of Opportunity In the short term, the
crypto market has a chance to extend the bullish momentum. The
factors pushing BTC and ETH into yearly lows seem to be mitigating.
These include the U.S. Federal Reserve (Fed) trying to stop
inflation by hiking interest rates. The financial institution has
entered a blackout period, meaning its representatives won’t make
public statements until the next Federal Open Market Committee
(FOMC) meeting. Inflation, as measured by the Consumer Price Index
(CPI), seems poised to slow down. As NewsBTC reported, this metric
experienced a 40-year hike but might take a step back as oil,
copper, and others trend to the downside. The CPI print relies
heavily on the price of commodities. Related Reading | Polygon
Price Explodes By 60% – Is MATIC Nearing $1 Target? The crypto
market is also apparently receiving support from traditional
equities. The two sectors have been correlated since the start of
the downtrend, and thus BTC and other cryptocurrencies might
benefit from stock bouncing to previous levels. #Stocks keep on
pushing up, bringing #Bitcoin with it. When markets correct 70 to
90% you load up and trade the risk. Did it in March 2020 and been
doing it again. Even just a relief rally is huge profits at this
point. — IncomeSharks (@IncomeSharks) July 19, 2022
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