Even though Bitcoin reclaimed the $17,000 level, investors remain wary of the leading cryptocurrency. The Fear & Greed Index shows there is still plenty of fear, even though not as outspoken as last week. Some optimism may be warranted, although caution remains advised.
Bitcoin Isn’t Out of The Woods Yet
Many traders and speculators will be happy to see bitcoin priced above $17,000 again. The world’s leading cryptocurrency has gone through a rough patch in 2022. It even dipped below $16,000 just a few days ago. Moreover, nearly all growth recorded after early 2021 has been negated since late November 2021. The ongoing downtrend remains firmly in place, even if there are some minor uptrends along the way.
Seeing Bitcoin drop from over $69,000 to under $16,000 is problematic. However, the issue isn’t native to cryptocurrencies either. All financial markets struggle for traction, forcing many companies to reduce their labor forces. That trend will continue for some time, as consumers are less eager to spend too much, and VCs keep their wallets closed. As a result, more layoffs are inevitable, and they will become more outspoken in crypto and finance.
Despite the overarching momentum, many remain hopeful Bitcoin will recover in 2023. Unfortunately, the current market outlook opposes that sentiment, as there is still plenty of bearish activity. Even with BTC gaining momentum and climbing above $17,000 again, there is no indication it will remain there. If the recent market trend repeats, it will fall by up to another 10% in the next few days. That wouldn’t be beneficial to anyone.
Furthermore, the recent uptrend to reclaim $20,000 was relatively unsuccessful. Bitcoin broke that critical resistance level for a while and was pushed to the mid-$18,000 range in the following week. Today, a push to $18,000 and above would be a significant victory for the cryptocurrency. Unfortunately, investors remain somewhat fearful, indicating more pain is on the horizon.
Fear & Greed Index Remains Bleak
Many factors influence the Fear & Greed Index for any asset. In Bitcoin’s case, there is often extreme Fear or normal Fear. Rarely does the market go into Greed or Extreme Greed, even when prices are as low as today. With the Index still in the “Fear” modus – and on the cusp of dipping into “Extreme Fear” again – no bullish momentum is expected. The current price level seems an excellent place to start a new rally, but there isn’t sufficient BTC demand to trigger any shift.
With the weekend around the corner, Bitcoin likely won’t remain above $17,000 for too long. That will push all other cryptocurrencies down in value, as most of them hinge on Bitcoin’s momentum. Ethereum (ETH) may prove a notable exception, as it noted bigger gains than Bitcoin this week. However, that also makes it more susceptible to steep losses if market momentum sours.
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