The Bitcoin and crypto market crash has completely eroded positive sentiment as bears have now gained control of the entire market. Over the last month, the Fear & Greed Index has been on a steady decline, falling to new yearly lows in the process. With the Bitcoin price falling to the $53,000 level last week, it has now sent the Crypto Fear & Greed Index to levels not seen since the FTX crypto exchange collapse back in November 2022.

Crypto Fear & Greed Index Crashes To 28

The Crypto Fear & Greed Index continues to roll in the Fear territory with a score of 28 out of 100 after enjoying a few months of Greed in 2024. This decline shows the unwillingness among investors to put money into the market, as expectations are that prices will continue to fall.

To put into perspective how bad this current market sentiment is, the last time that the Crypto Fear & Greed Index was as low as 28 was back in November 2022. This was following the infamous FTX crash, which saw the Bitcoin price go as low as $16,000.

Since then, the Index has managed to stay above a score of 30, fighting off the tendency to fall into Extreme Fear at each turn. However, it seems that the market has succumbed to bearish pressure completely, something that could finally push it into the Extreme Fear territory for the first time in two years.

Bitcoin Recovery Could Be Imminent

While the Crypto Fear & Greed Index plummeting to a score of 28 and firmly sitting in the Fear territory has pushed investors away, it could be a good thing going by historical performance. One thing that has been consistent is that the index falling to Extreme Fear has usually marked the bottom of a decline.

For example, back in November 2022 when the Bitcoin price plummeted toward $16,000 and pushed the Crypto Fear & Greed Index below 28, it marked the bottom of the market. There was some sideways movement for a while. However, in the following months, the market began to recover and began another bull run.

From the bottom in November 2022, the price rose by more than 250% to reach a new all-time high in 2024. Now, if this trend were to hold, then the Bitcoin price could be looking at another rebound once accumulation is done that could trigger another run to a new all-time high.

At the time of writing, the Bitcoin price is already seeing some recovery off the lows to trade at $57,200. While this is still an 8.8% decline in the last seven days, it is still a welcome recovery from the weekend lows below $54,000.

Featured image created with Dall.E, chart from Tradingview.com

Over the weekend, Bitcoin (BTC) ‘s price circled between $54,424 and $58,215. However, as the new week begins, the coin presents an interesting revelation on-chain that could influence its next direction.

To put it in perspective, this condition has been historically crucial to BTC’s recovery. Will it be the same this time?

Bitcoin Oversold, Drives Multiple Bids

The metric in question is the NVT Golden Cross. NVT stands for Network Value to Transaction. Defined as a reformed index of the NVT ratio, the metric gauges if Bitcoin has hit the bottom or is at the top. 

When the value of this metric is 2.20 or above, it means the coin has hit the top, and a decline is imminent. As seen in the image below, this happened in December 2023, March 2024, and most recently, May.

Comparatively, if the NVT Golden Cross is under -1.60, it means that BTC is near or has hit the bottom. 

Currently, the metric is at -1.39, a potential sign of overselling. This selling pressure can be linked to Mt. Gox’s recent movement of BTC. 

Apart from that, the numerous transfers by the German government played a part. However, as it stands, the coin may be on the path of recovery, as overselling could foreshadow a rebound.

Furthermore, market participants seem to be waiting in line to buy BTC at the current discount prices. BeInCrypto discovered this after examining the Exchange On-chain Market Depth.

Read More: How to Buy Bitcoin (BTC) on eToro: A Step-by-Step Guide

This metric considers the activities on the order books of the top 20 exchanges. Divided into two parts, Exchange On-chain Market Depth considers the bid (buy) and ask (sell) segments.

According to IntoTheBlock, participants have placed bids for 22,075 BTC at an average price of 55,671. However, the total value of BTC set to be offloaded is 11,514 BTC at an average price of $55,673

Considering the higher value to be bought, Bitcoin’s price may evade another downturn and recover some of its recent losses.

BTC Price Prediction: No More Collapse

At press time, Bitcoin is trading at $56,752. However, the Liquidation Heatmap suggests that the price could be higher in the short term.

Liquidations Heatmap uses color variations to gauge the intensity of buy and sell orders in the market. Cooler colors like purple indicate a low level of activity. But when colors like green or yellow appear, it means the liquidity is concentrated at a price level.

By analyzing the heatmap, one can spot potential areas of interest, resistance, and support levels.

According to Coinglass, there is a high level of liquidity at $57,516 and another at $58,037. This high level of liquidity could attract a Bitcoin price increase in these regions.

Read More: Bitcoin (BTC) Price Prediction 2024/2025/2030

The Relative Strength Index (RSI), which measures momentum, also supports this potential. On the daily BTC/USD chart, it is at 34.61. 

When the indicator’s reading is below 30.00, it is oversold. When it is above 70.00, it is overbought. Therefore, the RSI’s position implies that Bitcoin has left the oversold region and aims for substantial recovery.

Going by the positions of the Fibonacci Retracements, which spot supports and resistance points, BTC may retest $58.251 if it breaks through $57,016.

Meanwhile, RektCapital, a pseudonymous analyst on X, also commented on Bitcoin’s price action. According to him, the coin may have left sideways trading while closing in on re-accumulation.

“Bitcoin is on the cusp of performing its first Weekly Candle Close below the Re-Accumulation Range Low for the first time in the over four months that this range has existed,” Rekt Capital posted.

However, the coin still trades below the 20-day Exponential Moving Average (EMA), which tracks price changes to determine a trend’s strengths or weaknesses. 

If Bitcoin’s price is above the 20-day EMA, it would indicate a solid bullish trend. However, as long as the coin wobbles below the threshold, it risks retracement to $55,019.

Bitcoin’s (BTC) price volatility continues to challenge investors. Early Monday, it fell to $54,200, negating gains from a peak of roughly $58,500 over the weekend.

The last few hours have been particularly turbulent, with significant fluctuations and liquidations characterizing the market.

Bitcoin Causes Liquidations of Over $100 Million in the Last 4 Hours

Despite a promising attempt at recovery on Sunday, Bitcoin faced stiff resistance that led to a sharp decline. Within just four hours, the market experienced liquidations totaling $113 million, comprising $70 million from long positions and $42.64 million from short positions. Overall, nearly $250 million worth of trades were liquidated in the past 24 hours, indicating persistently choppy conditions.

Avinash Shekhar, co-founder of the crypto derivative exchange Pi42, provided insights into the market’s volatility in an interview with BeInCrypto.

“Bitcoin’s price is locked in a tug-of-war between bulls and bears. Sellers pulled the price down to near $53,500 on July 5, yet lower levels attracted buying by the bulls. Then, bears again drove the price down from $58,300 to $54,200 in the morning of July 8,” Shekhar told BeInCrypto.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

Meanwhile, Metaplanet, a Japanese investment firm, has taken strategic steps to strengthen its position in the crypto market. On July 8, it announced a purchase of 42.47 Bitcoin, roughly worth around $2.35 million.

This happened after the company announced on June 24 that it would issue a $6.2 million bond to bolster its Bitcoin holdings. The decision aims to enhance Metaplanet’s financial stability by incorporating Bitcoin as a reserve asset. The firm seeks to mitigate risks associated with Japan’s economic challenges, including high government debt and sustained negative real interest rates.

Meanwhile, potential selling pressures loom from Mt. Gox investors and the German government. Recent reports indicate that Bitcoin addresses linked to German authorities transferred 700 BTC, valued at $40.47 million, to an unidentified ‘139PoP’ address this past weekend, as identified by Arkham’s on-chain analytics.

This activity is part of a broader pattern of behavior from the German government, which has recently moved significant quantities of Bitcoin to major exchanges such as Coinbase, Bitstamp, and Kraken. These moves followed the seizure of 50,000 BTC earlier in the year from the film piracy site Movie2k.

Read more: Who Owns the Most Bitcoin in 2024?

The balance between optimism and caution in the crypto market continues to provoke debate and speculation among stakeholders. However, the sentiments are more aligned towards fear. The crypto fear and greed index indicates a score of 28, which is in the fear zone.