On Friday, the cryptocurrency market fear and greed index collapsed to “extreme fear,” reflecting growing anxiety among investors as the price of Bitcoin fell to a weekly low of $53,700.
This drop marks the continuation of a broader sell-off that has plagued the market, particularly since Bitcoin struggled to maintain its momentum above the critical $60,000 threshold.
Bitcoin targets $53,000 amid bearish sentiment
The sharp drop in Bitcoin’s value can be traced back to a significant decline in August. crashattributed to challenging macroeconomic conditions that resulted in increased liquidity outflow from risk assets, including cryptocurrencies.
Furthermore, September has historically been a bearish month for Bitcoin, with an average negative return of 6%. So far, just six days into the month, Bitcoin has already recorded an 8% drop, a trend that market expert Benjamin Cowen suggests It could align with typical September behavior if the month ends at this pace.
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However, further price pullbacks could occur if key support levels fail to hold. Analyst Justin Bennett pointed out that Bitcoin appears to be heading towards a target of $53,000 after a failed attempt to retest its all-time high of $69,000, which was reached in late August.
Bennett said that while the situation remains fluid, there is a chance of a brief relief. meeting in the range of $52,000 to $53,000 before a deeper correction could take the price to $48,000.
Another analyst, Michael van de Poppe, has also weighed in on the current market dynamics, stating that the market may have overextended itself by taking liquidity from above.
From Poppe anticipa Bitcoin will likely test the $53,000 level before any bullish move occurs. For Bitcoin to regain its footing, van de Poppe emphasizes the need to reclaim the $56,000 mark following the recent drop.
Key factors that could catalyze BTC price recovery
Despite this bearish sentiment dominating the market, BTC investor Lark Davis remains optimistic about the future, suggestion that the next six months could be crucial for Bitcoin and the market in general, regardless of recent price corrections.
One of Davis’ key points is the upcoming fourth quarter, which has historically been a bullish period for BTC, especially in halving years. He also highlights the rise in the M2 money supply, which could lead to more capital being injected into the market, further fueling a potential rally.
Davis also looks at the possibility of rate cuts by the US Federal Reserve, which analysts suggest could act as a significant catalyst for BTC PriceIf the Fed implements 25 basis point cuts, it could create a more favorable environment for the entire cryptocurrency market.
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Another critical factor Davis points to is the upcoming US elections, which are just 60 days away. reported By NewsBTC, a possible return of former President Donald Trump could have a positive impact the cryptocurrency market.
Trump has indicated plans to put BTC at the forefront of his economic agendaincluding easing regulations and fostering a more favorable environment for cryptocurrencies. This change could generate greater confidence among investors and potentially significantly boost BTC prices.
However, it remains to be seen what the next few days will bring for the Bitcoin price as the bearish sentiment in the market is palpable, but October holds potential gains as has historically been the case in past years.
At the time of writing, the largest cryptocurrency on the market was trading at $54,100.
Featured image of DALL-E, chart from TradingView.com
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