‘Extreme fear’ grips Bitcoin price, but analysts point to signs of a potential reversal

After traders chose to stay put ahead of the FOMC meeting, the Federal Reserve indicated that it will continue its policy of raising interest rates. The market settled down into a holding pattern in May 25. Alternative.me data shows that the Fear and Greed Index is experiencing the longest period of extreme fear since the crash in Mach 2020.

Crypto Fear & Greed Index. Source: Alternative

Cointelegraph Markets Pro and TradingView data show that Bitcoin’s price action has been compressing into a narrower trading range. However, technical analysis indicators don’t provide much insight as to the direction of a breakout.

BTC/USDT 1-day chart. Source: TradingView

Here are some predictions from analysts about the future of Bitcoin prices.

As Bitcoin fights for $30,000, whales pile up

BTC/USDT 15-minute chart. Source: Twitter

Michael van de Poppe (market analyst) stated that #Bitcoin crossed $29.4K and then ran to the next resistance zone. We’ll reach $32.8K if we have $29.4K. Finally.”

It is interesting to see that, while fear is the dominant sentiment at these price points, Santiment, an on-chain intelligence company, pointed out that whale-pockets have used this opportunity to acquire well-priced BTC.

The Bitcoin price and its distribution Source: Santiment

Santiment stated,

“As #Bitcoin continues to tread water at $29.6K the amount of key whale address (holding 100-1000 $BTC) continues to rise after the massive dumping in January. In the past, we have seen a correlation between this tier’s price and its address quantity.

The price could drop to $22,500

The following chart was posted by Rekt Capital (a pseudonymous Twitter user) that shows how Bitcoin will perform following the appearance of a Death Cross. It depicts what one should expect if the “historical prices tendencies relating the #BTC Death Cross continue […]”

BTC/USD 1-week chart. Source: Twitter

Rekt Capital said,

“$BTC will fall from the Macro Range Low support and continue its decline to complete -43% downside. The 200-Week MA at $22500 is confluent to the -43% mark.

Related: Scott Minerd claims that Bitcoin’s price will fall to $8K but technical analysis suggests otherwise

“A pivotal retest”

Caleb Franzen, an economist, touched on the importance of Bitcoin’s current price. He posted the following chart, which shows the long-term performance compared to its weekly anchored volume weighted average price (AVWAP). Noting that “This is pivotal retest similar to the dynamics of March 2022.”

BTC/USD vs AVWAP 1-week Chart. Source: Twitter

Franzen said,

A rebound in the weekly AVWAP could boost bullish probabilities from the COVID high. It would be a dramatic increase in bearish probabilities if it falls below it, which could foreshadow a retest the grey range, $13.8k-19.8k.

The total cryptocurrency market is now worth $1.265 trillion. Bitcoin’s dominance rate at 44.8%.

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