The Fear and Greed Index fell to a reading of 8, comparable to March 2020 values. At the time, Bitcoin’s price hit a bottom at around $3,800.
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According to Arcane Research analysts, the index has spent 56 days in the fear zone, a record.
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Market participants are undoubtedly tired of this; many capitulate. Historically, buying has been a profitable strategy in periods of fear. However, it’s not easy to catch a falling knife, the researchers said.
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In technical analysis, $20 000 is a critically important level for Bitcoin, as it marks the peak of the previous price rally.
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Throughout its history, Bitcoin has never traded below the cycle’s peaks. Therefore, a move below this level could trigger the capitulation of many hodlers and deleveraging, the experts noted.
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Around the $20,000 mark, there is also significant open interest in Bitcoin options. This is an additional pressure on the spot market if the aforementioned level does not hold against the bears.\n
Earlier, Glassnode analysts predicted that the market is entering the deepest phase of the bear cycle.
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