Crypto markets plunge into extreme fear
The price of Bitcoin has continued to fall recently, with market sentiment reaching a "fear" level, with many investors feeling uneasy as the price briefly fell below $54,000. Bitcoin could fall further below $50,000 this weekend, a drop of 12%, according to predictions from BitMEX founder Arthur Hayes.
According to the "Fear & Greed Index", the index fell to 23 today (9/7), indicating that the market is in a state of extreme fear, which is the lowest level since August 8. The index has plummeted over the past 24 hours, reflecting the continued decline in market confidence in Bitcoin.
Image source: "Crypto City" Fear and Greed Index shows that the current market sentiment is fear
The price of Bitcoin fell by 5% in 24 hours, reaching as low as $52,568, and was at 53,800 at the time of writing.
Source: TradingView Bitcoin Price Chart (Daily)
Arthur Hayes predicts Bitcoin will plummet further
Arthur Hayes expressed his opinion on X, saying bluntly:
"Bitcoin is too heavy. I went short, aiming for under $50,000. Pray for my soul, I'm a madman."
Hayes' forecast comes amid a slowdown in the U.S. economy and disappointing employment data adding to pessimism, adding to market jitters.
Source: X Arthur Hayes believes that the price of Bitcoin may fall below $50,000
Not only Bitcoin, but other major cryptocurrencies also suffered losses. Ethereum is down 2.23%, Solana is down 2.82% and $XRP is down 2.19%. The market pullback resulted in a $290 million liquidation in the crypto market over the past 24 hours, including $222 million in long orders and $71 million in short orders.
Technical analysis shows heightened risks
In addition to Hayes’ view, other analysts have expressed concerns about Bitcoin’s prospects. Bitcoin could fall further below $50,000 if it cannot hold on to $54,000, according to well-known analyst Caleb Franzen. This is supported by technical analysis, especially the cloud layer region formed by the “200-day simple moving average” (SMA) and the “exponential moving average” (EMA). If Bitcoin fails to hold on to $54,000 and appears a daily closing price below that level, a significant shift in market trends could occur further lower.
Source: Caleb Franzen Bitcoin daily chart with 200 SMA
However, Caleb Franze also said that there are still some positive signs from other technical indicators. For example, Bitcoin’s Relative Strength Index (RSI) shows bullish divergence in the short term, which may hint at the possibility of a rebound.
Chart Source: Caleb Franzen Bitcoin shows bullish divergence from RSI in the short term (2 hours)
There are still risks in the market, investors need to be cautious
Despite some positive indicators, overall market sentiment remains in a state of extreme fear. Cryptocurrency investors need to be wary of the risk of a further dip in the market. Famous trader Peter Brandt also believes that the market is still dominated by sellers. He pointed out that Bitcoin has a "trumpet pattern" that indicates violent fluctuations in the future. If Bitcoin tests the lower edge of this pattern, the price could fall further to $46,000.
Source: Peter Brandt Bitcoin appears in weekly “trumpet pattern”
Nonetheless, Brandt also emphasized that if the market can break through resistance, it may usher in a new bull market and reach new all-time highs. However, as far as the current situation is concerned, the power of sellers is still stronger than that of buyers, and it remains to be seen whether the market will return to a situation dominated by bulls.
As market sentiment moves toward extreme fear, Arthur Hayes’ predictions certainly cast more shadow over the crypto market. Investors should remain cautious in this volatile market, especially in the coming days when it comes to whether Bitcoin will fall below $50,000.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
