Bitcoin's recent decline marks a significant shift in market sentiment, questioning whether its price is poised for recovery or further decline. Following a peak at $109,000, Bitcoin's value dipped to as low as $91,400, indicating a month-long downtrend.
According to Alternative.me, as Bitcoin's price retracted in recent weeks, market sentiment reflected this downturn. The Fear and Greed Index, which hit a high of 84 suggesting "Extreme Greed" on January 22, has now dropped to a "Fear" level, with a score of 44.
Despite the retreat from its all-time high, Bitcoin's bull market may still have momentum. While a 12% price reduction, equivalent to a $13,000 loss, signifies a notable correction, such adjustments are common and potentially beneficial for sustaining a broader bull trend. The global economic outlook remains precarious, with looming recession fears and significant national debt, yet this hasn't derailed the upward trajectory seen in markets. Notably, the S&P 500 recently achieved a new all-time high, suggesting continued strength in both equities and cryptocurrencies.
Based on TradingView data, Bitcoin's near-term price trajectory shows signs of stabilization. The correction hit a key Fibonacci level at 0.786, leading to a bounce. Recent movements indicate a potential reversal above the descending trendline and the 0.618 Fibonacci level. Achieving a price above $98,800 could establish a new local high, signaling a possible upward trend.
USDT Dominance (USDT.D) offers insights into crypto market dynamics. A decline in USDT dominance suggests conversion of stablecoins into cryptocurrencies, primarily Bitcoin. Despite persistent bear flags lowering dominance, a strong resistance level at 5.35% and support at 3.8% is evident. Breaching this support could pave the way for Bitcoin price increases.
Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.