KEY POINTS

  • Bitcoin continue to hover below $50,000
  • The fear and greed index shows extreme fear in the market
  • Analyst suggests BTC market cycle will lengthen

Bitcoin dropped below $50,000 on Saturday as feared by many analysts. The king of cryptocurrencies dropped to $42,000 before quickly rebounding to $48,000. 

The fear and greed index of Bitcoin, released by Alternative.me, shows the market sentiment for the cryptocurrency is "extreme fear," and traders are panic selling. For times like these, Warren Buffet once stated, "Be fearful when others are greedy, and greedy when others are fearful." 

Data from CoinMarketCap shows that Bitcoin dropped by nearly 1.34% in the past 24 hours, reducing the market capitalization of the token to $911 billion. As of 4:23 a.m., BTC's dominance dropped to 40.86% due to the fall of market cap below $1 trillion. 

The coin's price reached a daily high of $49,438 Monday, before falling to a daily low of $47,730. The liquidation data from CoinGlass shows that $2.09 billion BTC longs were liquidated on Saturday. 

BTC liquidation data BTC liquidation data Photo: CoinGlass

Bitcoin price anlaysis

Bitcoin analysis on the daily chart below shows a bearish scenario for the cryptocurrency. The prices broke down from the lower end of the Bollinger Bands after multiple bearish red candles on the daily chart. The 50-day and 100-day moving averages continue to act as the resistance after prices fall below these key averages. 

BTC price chart BTC price chart Photo: www.tradingview.com

The chart below shows that the bullish divergence was prevented in the chart below when the signal line (orange) failed to break above the MACD line (blue). This was unexpected and led to the continuation of the bearish retracement. The intensity of bars of the MACD histogram also suggests that Bitcoin will continue to remain bearish. 

The RSI indicator shows that Bitcoin entered the oversold zone, dropping below 30. The gradient of the line is sharply negative, indicating that the selling orders are being placed by traders in greater numerical strength as compared to the buying orders. As of now, BTC is 30.88% low from its all-time high at $69,000.

BTC price chart BTC price chart Photo: www.tradingview.com

Bullish journey lies ahead

According to analysts, Bitcoin has carved a bullish path ahead of it. Popular trader and trading algo developer Kong Trading said that they see a 15% pump for Bitcoin today. While this is a bullish analysis, prices are rather bearish for BTC. 

On the other hand, Lark Davis, a popular analyst and Ethereum supporter said lower prices in the short term are definitely possible and more likely to happen.  

"I am an unapologetic unrelenting #bitcoin and #crypto bull. This market is literally the single greatest wealth creation opportunity for you in your lifetime. That being said, we could still be going lower short term," said Davis.

He also claims that the Bitcoin cycle is getting longer. Historically speaking, every Bitcoin halving is followed by a bull market while preceded by a bear market. However, Davis claims that this time, the BTC bull cycle is lengthening and also, investors "probably won't see a top until well into 2022."

Benjamin Cowen, analyst and CEO of "Into the Cryptoverse," said that the last four-year Bitcoin cycle ended in 2019. "It makes absolutely no sense to assume that Bitcoin will repeat itself exactly every four years, he added.

International Business Times holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

Parth Dubey holds Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Cardano (ADA) and Polygon (MATIC).

Investing in Bitcoin Major financial institutes are viewing Bitcoin as a new asset class. Photo: Pexels