Bitcoin price is in recovery mode as the Fear & Greed Index enters the fear zone
Bitcoin price challenged the key $47,000 resistance amid a perfect storm of dwindling supply and energy-draining bears. At the time of writing, BTC is changing hands at $47,053, up nearly 5% in the last 24 hours.
BTC/USD 4-hour chart | Source: TradingView
Can Bitcoin price overcome make-or-break resistance?
BTC has rallied $2,000 since as low as $43,700. In it, many think $47,000 has now formed a rally to trigger a bull run.
On the upside, first, Bitcoin’s price has to break through $47,000, as that’s the current resistance. If that fails, upward continuation to $50,000 is possible as the final hurdle before a potential all-time high test. Previously, whale selling behavior had suggested that $47,000 would be difficult to beat.
At $46,000, more of the Bitcoin supply is owned by powerful people than ever before, as AZCoin News reported.
In its latest weekly report, “The Week On-chain,” analytics firm Glassnode revealed that long-term holders (LTHs) own nearly 13 million BTC — 80% of the supply. The extent of strong hand belief in Bitcoin this year contrasts strongly with previous eras, and the trend shows no sign of stopping.
Moreover, Bitcoin exchange balances have returned to 13.1% of circulating BTC supply, winding back the clock on inflows to Feb 2018. The all-time peak exchange balance was 17%, hit on the exact bottom of the March 2020 sell-off. The trend changed that day.
The strong level of confidence in Bitcoin this year stands in stark contrast to previous eras, and the trend shows no signs of stopping.
Bitcoin’s Fear & Greed Index moved sharply into the fear territory after the crypto sell-off last week. For much of August, the market was in a state of extreme greed as prices rose across the board. September tends to be a negative month for crypto as a whole. While the month kicked off strong, sentiment has deteriorated rather quickly.
Previous episodes of negative sentiment preceded price rises similar to last September and this July, as shown in the chart below.
Source: Delphi Digital
At the time of writing, based on statistics from Alternative.me, “Crypto Fear & Greed Index” is showing at 49, signaling “Neutral”.
Crypto Fear & Greed Index as of Sep 15 | Source: Alternative.me
Most of the Top 10 CoinMarketCap are shown in green. Among them, Polkadot (DOT) is the biggest gainer with 8% in the past 24 hours, trading at $36.79.
Solana has fallen 10% since the news of a network shutdown spread. Quite a bit of polarization is in effect, with some referring to this as a planned developer halt to the SOL blockchain. As the dust settles, the social volume has erupted to all-time highs.
Ethereum temporarily jumped back above $3,400, rebounding mildly following the market-wide dip from last week when prices were then above $3,900. Following the correction, ETH’s average gas prices (in GWEI) have dropped from 237 to just 88.
Meanwhile, Ethereum’s hashrate has recently reached a new all-time high (ATH) as miners have resumed operations despite the hostile approach undertaken by Chinese authorities earlier this year. Recall that Ethereum’s hashrate had hit a peak of 632.8 TH/s on May 19, 2021, following increased activities on the network just after ETH hit an ATH above $4,300.
However, hashrate started to suffer after China announced a complete crackdown on crypto-related activities, especially mining, on May 21, 2020.
This move not only caused the price of Ethereum to plummet from $3,399 to $2,502, it also harmed the network’s hashrate as it dropped to a three-month low. By September 2021, the number of ETH miners in China has decreased and many seem to have resumed activity in other regions, which is evident by the increasing computing power on the network.
According to data from Etherscan, the network’s hashrate hit an all-time high of 715.4 TH/s, suggesting that miners have recovered from the effects of China’s crackdown.
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