Sentiment Turns Fearful as Bitcoin Recovers Above $48,000

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Mon, 03/01/2021 - 15:15
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Alex Dovbnya
Traders are fearful after a Sunday dip to the $43,000 level
Sentiment Turns Fearful as Bitcoin Recovers Above $48,000
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The Crypto Fear and Greed Index, a popular tool for gauging market sentiment, has dipped into the "fear" zone for the first time since Jan. 22.

After dropping to the value of 38, the market is currently at its most fearful since last September when Bitcoin temporarily experienced a sharp reversal together with U.S. tech stocks.

Historically, such periods of fear present good buying opportunities. After the index declined to 40 on Jan. 22, Bitcoin ended up resuming its rally in early February.

The fluctuating market sentiment is also a perfect case for studying trading psychology. When Bitcoin tapped $42,000 for the first time on Jan. 8, the index rose to a whopping 93. Yet, the index plunged to the aforementioned 38 after Bitcoin dipped to $43,000 yesterday.

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Peter Brandt Reveals What It Will Take for Bitcoin to Go Higher

Bitcoin recovers, but institutional demand cools

Bitcoin has now recovered to an intraday high of $48,637 on Bitstamp, soaring over seven percent after yesterday's sell-off.

This relief rally, however, could be kneecapped by waning institutional demand. In its recent research note, JPMorgan highlights that the four-week rolling average of flows into funds has subsided as of late.

JPMorgan
Image by @BrianSozzi
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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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