April has been a good month for a majority of traders and investors as the collective market surged on the back of bitcoin breaching the $5,000-mark. Many cashed out significant profits after months of what the cryptocurrency ecosystem called the “crypto-winter.”
However, not everything was rainbows and unicorns as strong market correction ensued a week after the surge, bringing down the prices of cryptocurrencies again. However, bitcoin managed to hold strong above the $5,000-mark, even as most other coins registered substantial losses.
A parameter which calculates investor sentiment, Fear Index, is often used by many prominent traders to predict price movement as the market mirrors the emotions of traders and whales. Mr. Anderson, a prominent trader and cryptocurrency analyst, is of the opinion that bitcoin could soar higher after an imminent pullback, in light of the current Fear Index.
In a Twitter thread, he substantiated his claims by stating that a majority of traders were scared of bitcoin prices falling again in the short term, which pointed at a major rally in the offing.
He opined that traders were expecting bitcoin to drop below the $4,000 mark, which it was treading before the April Fools’ Day rally. This effectively means that bitcoin was going to test new bottoms before pumping to the sky.
Mr. Anderson said that there was currently “more fear” of BTC dropping below $4,900, than when traders were wary of a pullback to $3,900. He used charts to show the different measures he utilized to arrive at the conclusion. He tweeted,
FEAR (BEAR CONTAGION DISEASE)
There is more FEAR currently at the pullback to $4900 than there was at the previous pullback to $3900
Disbelief is a Bull’s friend. The sentiment is saying she’ll go higher before she goes lower
— Mr. Anderson (@TrueCrypto28)
The fear of BTC dropping to $4,000 region was again reinforced when Weiss Ratings recently suggested that the king coin could test the $4,000 region, since the market was overbought.
This could spell disaster for the cryptosphere as a fall of this magnitude could bring down the collective cryptocurrency market to new lows. However, this could also be the point from where prices bounce back to higher highs. This can also give birth to a stronger altcoin season which many prominent analysts, including Mati Greenspan, had previously talked about.
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Published at Sun, 14 Apr 2019 03:22:37 +0000
