After tapping a low of $29,300 on July 20, 2021, Bitcoin (BTC) rebounded more than 8% to reclaim the $32,000 level. However, market sentiment measured by the Crypto Fear and Greed Index (CFGI) remains extremely low, indicating 'extreme fear' in the market. While this term may sound alarming, historically, such levels have often presented optimal entry points for acquiring assets at lower prices. Nonetheless, data from Tradingview's technical indicators show Bitcoin still in the 'sell' zone, while oscillators lean toward 'neutral.'
CFGI Sentiment Metrics Reach 'Extreme Fear'
Bitcoin's price fell to $29,300 on July 20, 2021, before rebounding above $32,000. Despite the recovery, short-term price predictions remain highly uncertain within the crypto space. Some analysts believe the price could drop again to the $20,000 region, while others argue that a rebound is underway and the next target could surpass the all-time high of $64,000. Traders who anticipate a rally point to similarities with Bitcoin's price action in 2013, when BTC plunged to $50 after soaring above $200 in mid-May, only to surge nearly 2,400% later that summer, eventually reaching its first four-digit all-time high.
After Bitcoin fell to $29,300 on Tuesday, the CFGI recorded a score of 10. This is not the lowest reading ever, but it is exceptionally low compared to most days. The last time the index hit 10 was in mid-June and late May. Prior to that, a reading of 10 or lower had not been seen for over a year, with the last occurrence during the March 12, 2020 'Black Thursday' market crash. While 'extreme fear' may seem bearish, traders often view it as one of the best times to enter the market. Periods dominated by panic selling and extreme fear typically offer cheaper assets than those marked by 'extreme greed,' which sits at the opposite end of the CFGI spectrum. The CFGI website explains that it 'analyzes emotions and sentiments from different sources and crunches them into one simple number.'
Oscillators and Moving Averages Tell a Similar Story
In contrast to the CFGI, Tradingview's BTC/USD technicals paint a comparable picture, though some indicators offer a different angle. A one-day summary of Tradingview's BTC/USD technicals leans toward the 'sell' range. Moving averages (MA) are more bearish, pointing to a 'strong sell' signal. Meanwhile, BTC/USD oscillators are more neutral. For instance, the Relative Strength Index (RSI 14) shows 'neutral,' and the Stochastic (14, 3, 3) also indicates 'neutral' territory. All moving average indicators suggest a 'sell' bias, while the Simple Moving Average (SMA 10) and Exponential Moving Average (EMA 10) are in the 'buy' zone. Among BTC/USD oscillators, the only 'buy' signal comes from the momentum indicator, but the Moving Average Convergence Divergence (MACD), a trend-following momentum indicator, is recorded as a 'sell' on Wednesday.
Delta Exchange CEO: '$30K Has Proven to Be Reliable Support Since May'
Despite Tuesday's plunge, Bitcoin continues to hold a key support zone. In a note sent to Bitcoin.com News, Delta Exchange CEO Pankaj Balani commented on the current support. 'Bitcoin has been grinding lower since the start of this month,' Balani said. 'Volatility has compressed significantly with a lower range. Bitcoin is trading in a significant support zone of $29,000 to $31,000 USDT. $30,000 has proven to be very reliable support since May. A breakdown of this level is likely to result in a significant increase in volatility and a final capitulation of crypto assets. That said, BTC is still in the $30,000 to $40,000 rectangle until a conclusive breakdown takes place,' the Delta Exchange executive added.
What do you think about Bitcoin's CFGI metric hitting 'extreme fear' and today's Tradingview technicals? Do you agree with Pankaj Balani's observation about reliable support? Let us know your thoughts in the comments below.