- Bitcoin has rebounded above $85,000, with the Fear and Greed Index shifting from extreme greed to a more balanced level, signaling potential market stabilization.
- Analysts predict that if key support levels hold, Bitcoin could see a significant rally, potentially reaching $128,000.
Bitcoin’s price fluctuations have once again sparked interest among investors, as the market sentiment undergoes a noticeable shift. After dipping below $80,000, Bitcoin has rebounded above $85,000, marking a potential turning point for the cryptocurrency. This movement aligns with a key change in the Fear and Greed Index, which has moved out of the extreme greed zone and into more moderate territory.
Market Sentiment Evolves Positively
Since early March, Bitcoin has been in a consolidation phase, facing substantial bearish pressure before its recent recovery. The return above $85,000 has offered a sense of reassurance to investors who closely track market trends. One of the most significant indicators reflecting this shift is the Fear and Greed Index, a tool that gauges investor sentiment based on various data points such as volatility, momentum, and social media activity.
Blockchain analyst Axel Adler Jr. has observed that the quarterly index has dropped by approximately 22 percentage points over the past two months. This movement indicates a transition from extreme greed to a more balanced level, reducing the risk of abrupt sell-offs and market instability.
Is the BTC Correction Ending?
If the Fear and Greed Index continues its downward adjustment by another 10 to 15 points in the coming weeks, Bitcoin may enter a period of relative calm. Adler predicts that this stabilization could occur within the next four to six weeks, leading to a reduction in emotional-driven price swings.
Interestingly, technical indicators suggest a bullish setup may be forming. The 30-day moving average appears to be establishing a local floor, reminiscent of previous correction cycles. For instance, during Bitcoin’s last major correction, the price dropped to $54,000 before surging by 107% to an all-time high of $109,400.
A Path to New Highs?
Crypto analyst Mags sees parallels between past patterns and the current market state. According to his analysis, Bitcoin might establish a new low at around $76,600 before rallying significantly. If key support levels hold, particularly the 45 mark on the relative strength index (RSI), Bitcoin could see a substantial 64% increase, potentially reaching $128,000. This target aligns with the Fibonacci extension level of 1.618, hinting at a new record high.
While the market remains in a crucial phase, technical signals are gradually shifting toward optimism. With investor sentiment stabilizing and historical trends suggesting potential upside, the coming weeks could be pivotal in determining Bitcoin’s next major move.
