Bitcoin Bull-Bear Cycle Indicator Signals Gains as Price Holds Above $60,000
Date: 2024-08-12 Author: Henry Casey Categories: CRYPTO PAYMENTS
The Bitcoin Bull-Bear Cycle Indicator, which tracks investor sentiment, is once again signaling favorable conditions for gains. This comes after three days of signaling losses as Bitcoin’s price plunged to levels not seen since February.
“Most Bitcoin cyclical indicators that were on the brink are now showing the beginning of a bull market again,” CryptoQuant founder and CEO Ki Young Joo said in a post on the X platform on August 9.
“Bitcoin is still in a bull market phase,” added well-known crypto trader PlanB.
Earlier, the indicator entered the bearish zone when Bitcoin fell below $50,000. This happened on August 5, and this day has already been dubbed "Black Monday of cryptocurrencies." It was the first drop below $50,000 since February.
Until August 8, Bitcoin was trading below the key level of $60,000, according to CoinMarketCap. At the time of publication, the price of Bitcoin is $60,732.
The seven-day decline amounted to 0.35%, which also affected investor sentiment. For the first time since January 2023, when the FTX collapsed, the cycle indicator gave a bearish signal.
The negative sentiment was also confirmed by the Fear and Greed Index in the crypto market, which reached the "Extreme Fear" mark on August 6 with a reading of 17 - this is the lowest value since the FTX collapse. However, the index has since recovered to a Neutral level of 48.
Some traders believe that such a quick recovery suggests that the recent price decline may have been a bear trap, with experienced traders deliberately lowering the price to entice less experienced market participants to sell.
Analysts are divided on where the price will go next, with some believing that Bitcoin’s recent decline is a replica of trends seen before previous bull runs, while others are skeptical.
On August 7, 10x Research’s head of research, Marcus Thielen, said that they were targeting a drop below $40,000 for Bitcoin to successfully enter the next bull market.
In a report on August 6, Cathie Wood’s Ark Invest noted that key support levels for Bitcoin were at $52,000 and $46,000.
Meanwhile, veteran trader Peter Brandt noted that the current post-halving decline is reminiscent of the 2015-2017 bull market cycle, which could indicate the possibility of a new rally.
