Data from Glassnode shows that the recent $ 2.56 billion Bitcoin crash was the largest in history. The “Corona crash” of March 2020 was the largest to date at 1.38 billion US dollars.
While 13% gains yesterday brought welcome relief, there is still uncertainty. The question everyone is asking is, are we still in a bull market?
Source: @WClementeIII on Twitter.com
The mood remains raw
The events of the past fourteen days have shown that Bitcoin is not immune to FUD or, as some suspect, market manipulation. Holding during this time was a painful experience for most. The biggest fear, however, is that last Wednesday’s crash signaled the end of the bull run.
Whether or not that is the case is still debated. From a sentiment point of view, a value of 22 on the Fear and Greed Index shows that the ailing nerves are still blank with extreme fear.
This is a significant improvement from yesterday’s 10 level. But to say the market remains cautious would be an understatement.
The Fear and Greed Index measures emotions and feelings to represent them on a scale from 0 to 100. 0 stands for extreme fear, while 100 stands for extreme greed.
A look at the Bitcoin daily chart reveals that BTC is currently below the 200-day moving average, suggesting that despite yesterday’s relief rally, the bears still have the upper hand. A close above the 200-day moving average is needed to allay fears that the bull market is over.
BTC is trying to build on yesterday’s earnings and work its way above the 200-day moving average. But until then, from a technical point of view, it’s too early to say with conviction whether the bull cycle will remain intact.
Source: BTCUSD on TradingView.com
What’s next for Bitcoin?
That hasn’t stopped a flood of analysts from giving their opinion on the matter. Fundstrat Global Advisors’ founder Tom Lee said volatility is the nature of Bitcoin. It maintains its pre-crash price prediction of $ 100,000 through the end of the year.
“I think Bitcoin is hypervolatile. That is in the nature of things, but that is exactly what creates the reward for people.
Even if Bitcoin is in the penalty box now, I still think it could leave over $ 100,000 in the year. ”
Similarly, in an interview hosted by Scott Melker, PlanB attempted to reassure viewers by saying that its stock-to-flow (S2F) and stock-to-flow X (S2FX) models suggest the bull market is intact.
According to his analysis, Bitcoin is well on the way to hitting $ 100,000 per S2F model or $ 288,000 per S2FX model.
“I’m very data-driven, so I don’t make it up, but I read the data, I look at my stock-to-flow models, the stock-to-flow model and the stock-to-flow X model, and both models actually show that we are certainly not at the end of the cycle.
We still have some leeway up to an average of $ 100,000 or an average of $ 288,000 if you follow the stock-to-flow X model. ”
S2F refers to a statistical analysis model that studies the effects of scarcity on Bitcoin price. Critics argue that scarcity is not the only price driver.