Crypto Market Extreme Fear: Reversal Signal or Bear Trap?

MGR Online•Economy•3h ago

Reader Briefing

Extreme fear in the crypto market, marked by severe oversold conditions and historical parallels, suggests a potential short-term reversal despite ongoing downside risks.

•The cryptocurrency market has entered an 'Extreme Fear' zone, with indicators showing historic levels of investor panic.
•Analysts suggest that such intense fear often precedes short-term rebounds, referencing past market behavior.
•Despite a strong 'oversold' signal and historical precedents for bounces, warnings remain about potential further downside and bear traps.
•The market is closely watching the monthly close for February, as consecutive negative months could set a new historic record for Bitcoin.

Overview

•The cryptocurrency market has entered the 'Extreme Fear' zone, reaching a critical juncture.
•Analysts from Matrixport have identified that selling pressure is easing, suggesting historical patterns of market reversals during extreme fear.
•Investors are cautioned against premature optimism, as severe oversold conditions on daily charts do not negate ongoing downside risks.
•The closing price of Bitcoin in February is crucial; a negative close would mark five consecutive red months, the longest streak since 2018 (2018).
•The Fear & Greed Index fell to 10 out of 100, the lowest point since June 2022 (2022).
•Matrixport's analysis indicates that the 21-day moving average falling below zero and then turning up is often a precursor to a "strong bottom".
•Frank Holmes of Hive Digital Technologies noted that Bitcoin's price is below its 20-day standard deviation by approximately two, a rarity seen only three times in five years.
•The market is observing whether current psychological support levels will hold or if the current consolidation is a prelude to further declines.

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Key Quotes

Matrixport Analyst

"Selling pressure is starting to ease, history repeats itself every time fear peaks, it often marks the start of a short-term rebound."

แรงเทขายเริ่มแผ่ว ชี้ประวัติศาสตร์ซ้ำรอยทุกครั้งที่ความกลัวพุ่งแตะจุดเดือด มักเป็นจุดเริ่มต้นของการดีดตัวกลับระยะสั้น

Matrixport

"Even though technical signals are pointing positively, Matrixport still warns to be cautious."

แม้สัญญาณเทคนิคจะเริ่มชี้ไปทางบวก แต่เมทริกซ์พอร์ตยังคงเตือนให้ระมัดระวัง

Matrixport

"Considering the cyclical relationship between sentiment and Bitcoin's price behavior, the latest reading indicates the market may be approaching another significant turning point."

เมื่อพิจารณาความสัมพันธ์เป็นวัฏจักรระหว่างความเชื่อมั่นและพฤติกรรมราคาของบิทคอยน์ ค่าที่อ่านได้ล่าสุดบ่งชี้ว่าตลาดอาจกำลังเข้าใกล้จุดเปลี่ยนสำคัญอีกครั้ง

Frank Holmes

"We've only seen this level of volatility three times in the past five years."

ระดับความผันผวนแบบนี้ เราเห็นเพียงแค่ 3 ครั้งเท่านั้นในรอบ 5 ปีที่ผ่านมา

Frank Holmes

"Historically, when such severe oversold conditions occur, the market usually sees a short-term rebound within 20 trading days afterward."

ในอดีตเมื่อเกิดเหตุการณ์ Oversold รุนแรงเช่นนี้ ตลาดมักจะมีการดีดตัวกลับในระยะสั้นภายใน 20 วันทำการหลังจากนั้น

Key Entities

Organization

Matrixport(เมทริกซ์พอร์ต)

A leading digital asset investment service provider that has published an analysis on the current state of the cryptocurrency market.

Alternative.me(อัลเทอร์เนทีฟ.มี)

Provider of the Fear & Greed Index used by global investors to gauge market sentiment.

Hive Digital Technologies(ไฮฟ์ ดิจิทัล เทคโนโลยีส์)

A major Bitcoin mining company whose Executive Chairman, Frank Holmes, provided insights into extreme oversold conditions.

Person

Frank Holmes(แฟรงก์ โฮล์มส์)

Executive Chairman of Hive Digital Technologies, offering a technical perspective based on Bitcoin's price deviations.