Key Takeaways:
- Bitcoin’s social sentiment indicates a rising fear, with mentions of sub-$70K levels surging.
- Technical indicators show Bitcoin at a crucial point, with potential support and resistance levels in focus.
- Historical price movements suggest a pattern of downside deviations, hinting at a possible consolidation phase.
Bitcoin is experiencing rising bearish sentiment on social media, with below-$70,000 mentions spiking to their highest level since late February, according to the data from Santiment.
The market players are becoming more concerned about a deeper correction, as there is a consensus emerging towards lower targets between $50,000 and $69,000. In the past, these moments of extreme fear have typically been followed by strong buying, as they are moments of capitulation prior to a reversal.
Market commentators theorize that a bottom can be formed when the social sentiment consensus is extremely bearish in nature, with fewer discussions of bullish price targets such as $100,000.
This shift in dialog may indicate market-wide exhaustion in selling pressure, potentially setting the stage for a reversal. However, without clear technical confirmations, there is great uncertainty as Bitcoin is coping with this volatile phase.
Technical Indicators Signal a Critical Turning Point For Bitcoin
Bitcoin’s recent price action indicates an important juncture, with major technical levels determining the way forward. The cryptocurrency has reached the target of the double-top formation, which is an indication that there may be a rebound from here.
But the close below the Kijun line last week is worrying, as the indicator is typically a level of major support in trending markets. If BTC fails to reclaim the line during the week, it could confirm more bearish momentum.
A successful rebound above this level would restore optimism and confirm new bull momentum. Alternatively, ongoing weakness could extend BTC’s decline, and there could be a more severe correction before there is any lasting recovery. Traders are closely observing market structure to gauge if Bitcoin will rebound from lost ground or if pressure to sell will persist.
Historical Patterns Suggest Potential Reaccumulation Phase
Bitcoin’s post-halving price trends give us clues about what may happen in the future. Recent price action is similar to previous post-halving periods, where downward deviations have been followed by subsequent recoveries.
Bitcoin posted a sharp 16-17% two-week downside wick, a movement that is typical in previous cycles where the coin fell below key support to rebound.
This reaccumulation phase is in keeping with previous price action, where Bitcoin initially weakens following the halving before establishing a higher low and gradually reclaiming its range.
Should history repeat, Bitcoin may attempt to make a higher low within the coming weeks, signaling a possible bottoming out before it resumes its bull run. However, if the pressure to sell keeps growing, more downside excursions may be observed, delaying any sustained rebound.
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