The price of Bitcoin has shown signs of stabilization on November 18, as investors seized the opportunity to buy the dip while awaiting critical updates from the FOMC and Nvidia earnings reports. Currently, BTC is trading at $93,700, recovering from a low of $88,790 earlier this week. Despite this modest gain, it remains entrenched in a bear market, down approximately 26% from its peak earlier in the year.
A key contributor to Bitcoin“s price action is the drastic decline in market sentiment, as reflected by the Crypto Fear and Greed Index, which has plunged to an extreme fear level of 15—its lowest since April. This index is derived from various data points, including Bitcoin”s price momentum, market volatility, derivatives trading, and its relative market value.
Additionally, the CNN Money Fear and Greed Index has also dropped to 12, marking a significant downturn since April. All components of this index, including market volatility, options trading activity, and demand for safe-haven assets, have entered the extreme fear category. Historically, Bitcoin tends to initiate bull runs during periods of high market fear. For instance, last July, a similar drop in the Fear and Greed Index to 26 preceded a rise to $54,000. This trend continued when the index fell to 19, leading to a peak of $79,000 shortly thereafter, with a further ascent to nearly $109,000 following that.
From a technical standpoint, Bitcoin shows potential for a rebound. The Relative Strength Index (RSI) has dipped into oversold territory at 30, and the Percentage Price Oscillator has reached its lowest point this year. Moreover, BTC has reached a double-bottom target of $92,000 and is exhibiting a hammer candlestick pattern. Analysts suggest that a rebound could push the price back to the psychological threshold of $100,000. However, a decline below this week”s low of $88,790 would negate this bullish outlook.
