The "fear" peak indicates that Bitcoin is about to recover strongly







The cryptocurrency market is on fire this week, with Bitcoin price surpassing the psychological level of $ 7,000 and the remainder outperforming King Coin.


However, despite the rising prices, the market is still in a state of extreme fear according to the fear and greed index. An analyst said that prices rose while investors were afraid to show the market in a period of skepticism and then the first sign of hope for the long-term resilience of digital assets.


What stage is the crypto market cycle?


Analysts have long debated the stage of an ongoing classic market cycle. All markets are cyclical and the cryptocurrency market is no exception.


Financial markets and even cryptocurrencies have experienced periods of steady growth and declines thereafter.


During these cycles, the head psychology will vary depending on their position in each cycle. For example, when prices are near the peak and the cycle is about to peak, investors tend to be irrationally aggressive with expectations of continued growth.


At this stage, investors often think that they are somehow genius and about to get rich. They have been growing their portfolio day by day, and they don't see the collapse coming right in front of them. And of course, the trend of reversal brings the price to the next bottom.


A period of classic skepticism can slow investors down when Bitcoin prices take off


Investors were psychologically reduced, tired of assets and lost hope of the ability to recover. This is called a period of skepticism among uncertain investors, often shaken in a downtrend.


bitcoin


The ultimate psychology of cryptocurrency


When the assets begin to regain positive momentum again, they ignore the signal that the uptrend is starting.


They simply believe that resilience is bogus and not finding a place for themselves. Immediately after that, the assets increased strongly and investors had to buy back at a higher price than they wanted, because they ignored the initial signs that the recovery process was taking place.


Bitcoin and the rest of the market have nearly doubled since the ultra-low was set in mid-March, meanwhile, index fear and greed are still in a state of extreme fear, suggesting that prices are likely to rise sharply to new highs and leave investors behind.


The Bitcoin index brought the price back to $ 3,800 and moved up


Bitcoin may rally higher in the medium term as one of the key technical indicators first flashes a bullish signal for the first time since February.


Dubbed Golden Cross, the bullish breakout pattern formed when the short-term MA closed above the long-term MA. Bitcoin on Tuesday drew the same pattern on a 4-hour time frame chart, confirmed by the MA 50 leap above the MA 200. Meanwhile, the price was higher than $ 7,400.




"The cloud turned bearish when the $ 9.5xx zone failed to hold it and turned green."


MA crossings often play an important role in the Bitcoin market. Traders see them as signals to enter an up or down position, mainly due to their high accuracy when predicting mid and long-term trends during development.


At the end of February, Bitcoin formed Death Cross - opposite of the Golden Cross, in which the MA 50 cross was lower than the MA 200. At the moment, BTC is trading near $ 9,500. The latter phenomenon has plunged prices since March 13 to a low of $ 3,858.


But now, with the first re-export of Golden Cross since January 4, 2020, traders anticipate the possibility of price increases and begin to accumulate Bitcoin. For example, from January until Death Cross was formed in February, the price increased to 43.87%. The fractal now shows similar price movement in the coming sessions.


Will Bitcoin regain $ 10K?


Besides, there are 2 other indicators that predict Bitcoin trading at $ 10,000 as a medium-term price target. The first index, Golden Cross, suggested that prices could rise more than 40% in the next sessions. The breakout scenario of the ceiling price pattern is near $ 10,176.


The next bullish indicator is ascending triangle, as shown in the chart below through the trend lines. The pattern is confirmed by the formation of a horizontal resistance near $ 6,984 with at least 2 lows in the ascending trendline below.


bitcoin


BTC / USD broke above the ascending trend line | Source: TradingView.com, Coinbase


Bitcoin's latest bullish move broke above resistance. Although the price is still at risk of a pullback in profit-taking psychology, a continuation of the upward move may cause BTC to increase by the height of the ascending triangle.


The green arrow in the chart above indicates the height and potential breakout range. The arrowhead is close to $ 9,800, indicating Bitcoin's medium-term price increase target of approximately $ 10,000.


Discount risk


Despite the formation of bullish indices, BTC is still in danger of denying the recent increase because it is hindered by the increasing wedge, which is a bearish model.


By standard definition, Bitcoin can continue to go up but only until the wedge peak is reached. After that, it will pullback down to the height of the wedge, almost bringing Bitcoin to as low as $ 5,000.


You can see the price of BTC here.


Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.


Thuy Trang


According to AZCoin News








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