It did not take much — around $3,500 off the Bitcoin price — for crypto traders to have a change of heart.
Bitcoin (BTC) trended toward a $40,000 retest on Feb. 12 as BTC price action bore out analysts’ predictions.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Trader hopes to avoid ‘ugly’ weekly close
An about-turn had ended the pair’s advance after U.S. CPI data hit, and calls soon emerged for a return to $40,000 or even lower to see how steely bulls’ resolve really was.
For Cointelegraph contributor Michaël van de Poppe, the results were still inconclusive, but caution was definitely needed going forward on short-timeframe trades.
“Bitcoin looking at the same resistance still,” he summarized alongside a chart showing potential support and resistance targets.
“Weekly order block rejecting in a harsh manner. Weekly candle starts to look ugly + several levels of fear across the market for coming weeks. Remaining flat at this stage.”BTC/USD 1-week annotated chart. Source: Michaël van de Poppe/ Twitter
Others meanwhile called time on the potential scope of Bitcoin’s longer-term downside.
“For those waiting for sub 30k $BTC, may the crypto gods be with you because the odds are not,” popular Twitter commentator Credible Crypto advised.
— Credible Crypto (@CredibleCrypto) February 12, 2022
Even at current levels, Bitcoin’s weekly close was set to be practically identical to the last, thus preserving the majority of the prior gains that had taken it out of the $30,000 zone.
Straight back to “fear”
The late drawdown this week was nonetheless more than convincing enough for crypto market sentiment to take a fresh hit.
According to the Crypto Fear & Greed Index, three days of “neutral” territory was enough before the return of “fear” as the main force at play among traders.
On Saturday, the Index measured 44/100, having reached 54/100 Wednesday.
Crypto Fear & Greed Index (screenshot). Source: Alternative.me
Discussing January’s weeks-long trip into the bottom “extreme fear” zone, trading suite Decentrader argued that a sentiment reset had likely already come based on historical patterns.
“Such extended periods of extreme fear give an indication that general market participants can be caught offside. We saw that play out with the fast move to the upside that $BTC has shown over the past two weeks,” analysts wrote in a market update released Friday.