Crypto Daily - Bitcoin is in a month-long local downtrend. From the new all-time high of $109,000, the price has steadily meandered down, reaching as low as $91,400 at one point. Is the $BTC price now beginning to recover, or is there more downside to come?
Fear increases in the crypto market
Source: Alternative.me
As Bitcoin has steadily lost value over the last few weeks, market sentiment has reduced accordingly. From the elation of Extreme Greed, at a score of 84 on 22 January, the Fear and Greed Index has now entered into the Fear territory and a score of 44.
Bitcoin bull run not finished yet
Bitcoin had a great run, and reached a pretty respectable high of $109,000. However, world economies are braced for recession, which could even become depression. Global debt has to be repaid, and where will governments find the money?That said, Bitcoin has not finished its bull run yet. In fact, it still has a good way to go. Yes, the price has decreased more than 12% from the top, equating to a loss of $13,000, but this is just a run-of-the-mill correction, and for the health of the overall bull market, it was sorely needed.
But doesn’t Bitcoin have to follow the stock market? There has been no sign as yet of any major decoupling by Bitcoin from traditional equities. And anyway, the S&P 500 made yet another new all-time high only yesterday. The bull market is not over, whether that be for Bitcoin or for the U.S. stock market.
Local bottom in for $BTC price?
Source: TradingView
The short-term chart for the $BTC price shows the ongoing downtrend. Nevertheless, the Fibonacci levels for the move from $92,3000 to $102,500 display that the price hit the deepest Fib level at 0.786 before bouncing back up.
Now it can be seen that the price has just started to move upwards from the descending trendline, and also from the 0.618 Fibonacci. Of course, this might just be another failed rally, but if the price can get above $98,800 another local higher high will have been made.
USDT Dominance signalling potential price increase for Bitcoin
Source: TradingView
A chart that gives a very good hint of the health of the crypto market is USDT Dominance (USDT.D). If the USDT dominance is decreasing, it means that those stablecoins are being spent on crypto, and primarily Bitcoin.
It can be seen that a series of bear flags have brought the dominance lower, and that a strong resistance level has formed at 5.35%, while an equally strong support level is at 3.8%. Should this latest bear flag play out, the horizontal support would be broken, leading to an increase in price for Bitcoin.
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