TL:DR;
After several consecutive weeks of charting impressive gains, BTC’s price tumbled by 15% from top to bottom last week and has failed to produce a notable recovery.
The crowd has gone into a full Fear, Uncertainty, and Doubt (FUD) state, which could actually be beneficial for bitcoin’s upcoming price movements.
Bitcoin/Price/Chart 23.12.2024. Source: TradingView Crowd Hints at Recovery?
Just six days ago, the primary cryptocurrency was flying high above $100,000 and ever skyrocketed to its latest all-time high of just over $108,000. This put the gains following Trump’s victory at roughly 60%. However, the landscape changed on Wednesday after the hawkish comments by Fed Chair Jerome Powell about fewer interest rate cuts for 2025.
In what turned out to be the worst trading week for BTC since Trump’s win, the cryptocurrency dropped by 15% from the aforementioned peak to $92,000. Although it has managed to recover some ground, it still fails to bounce off in a manner similar to the previous corrections and is currently struggling to remain above $95,000.
According to the crypto analytics platform Santiment, this extended correction has made the crowd fearful as the overall sentiment was sent “down to its most negative statistical point of the year.” However, this could be a blessing in disguise for BTC as the asset tends to move in the opposite direction of retail investors’ expectations, said the report.
BREAKING: Crypto’s further flush has sent Bitcoin’s crowd sentiment down to its most negative statistical point of the year. Vocal traders are now showing severe FUD, and that’s good news for contrarians who know markets move the opposite direction of retail’s expectations. https://t.co/lYvTWbRX25 pic.twitter.com/AfhVJwRHlj
— Santiment (@santimentfeed) December 22, 2024
BTC Buy Signal?
Crypto analyst Ali Martinez outlined a potential ‘buy signal’ for BTC after the correction due to the TD sequential on the 4-hour chart. The indicator identifies the exhaustion in either direction and typically pinpoints the beginning of a reversal.
The TD Sequential presents a buy signal on the #Bitcoin $BTC 4-hour chart, anticipating a price rebound! pic.twitter.com/acDIusZCkW
— Ali (@ali_charts) December 22, 2024
Martinez further brought up a key support zone for bitcoin that can send the asset soaring once again. However, if broken to the downside, BTC could tumble hard to around $70,000 as there’s not much support between here and there. The cryptocurrency currently sits at the lower end of the crucial support, which extends from $97,041 to $93,806.
In fact, the asset slipped below the latter during the night but managed to bounce off, at least for now.
The key support zone for #Bitcoin $BTC now lies between $97,041 and $93,806. If this critical demand area doesn’t hold, we could see a sharp drop to $70,085, as there’s minimal support below. pic.twitter.com/cHdr5mKxhi
— Ali (@ali_charts) December 22, 2024
The post Bitcoin’s 15% Weekly Drop Results in Massive FUD: Here’s Why That’s Good News appeared first on CryptoPotato.
