The crypto market has found itself at odds since the price of bitcoin had fallen to $20,000. This remains an important technical level for the digital asset because it is right above its previous cycle peak. As such, investors across the space watch with bated breaths to see if bitcoin will be able to hold this level. This has, in turn, led to a decline in investor sentiment during this time, causing the Fear & Greed Index to plunge low.
Crypto Index Sits At 25
The Crypto Fear & Greed Index is an indicator that draws from a number of metrics to give an aggregate score to represent how investors are feeling toward the market. It ranks these across four categories, and presently, investor sentiment falls in the lowest of these.
In its most recent update, the Fear & Greed index places the market in the extreme fear territory with a score of 25. This is after the index had hit its lowest of 20 in more than a month, signifying some rise in positive sentiment in the last day.
However, the present score is not so good for the crypto market. With a sentiment like this, investors are wary of putting any money into the market, causing panic and leaving the playing ground to the sellers. This works to push the prices of digital assets in the space even further down.
Bitcoin Struggles With $20,000
The $20,000 mark has been one of the hardest levels to maintain for bitcoin. Volatility always seems to shoot up whenever bitcoin is at this point, leading to erratic movements in price. This way, the digital asset continues to move above and below $20,000.
Nevertheless, bulls continue to put up a fight at this level because there is no significant support below this level except at $17,600. This cycle’s low, which had plummeted below the previous cycle peak, puts bitcoin in a perilous position.
Historical data puts bitcoin at least 80% down from its all-time high for the bottom of the bear market to be in. If the market follows this trend, then $17,600 may not be the bottom for the market. Bitcoin is only about 70% down from its all-time high as it currently stands. An 80% drawdown would put it around $15,000.
However, it is important to keep in mind that bitcoin has broken different historical trends during this cycle. An example is that its price has never fallen below its previous cycle peak, so an extension to this deviation could see bitcoin shake off the expected 80% drawdown.
Featured image from CNBC, chart from TradingView.com
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