bitcoin Sentiment has sunk into extreme pessimism, suggesting a tactical or provisional low from which a bounce is likely, according to analytics firm 10x Research.
The company’s proprietary “Greed and Fear” index, which measures market sentiment, has plummeted to a record low of less than 5 points. Readings below 10% represent extreme fear or pessimism, and above 90% indicate green or excessive optimism.
More importantly, the index’s 21-day simple moving average has fallen to 10%, a level that has consistently marked tactical lows over the years.
“Our own 10x Greed & Fear index has been near its lowest possible reading, and the slowest moving average has now reached the 10% zone, a level that often marks a tactical low,” Markus Thielen, founder of 10x Research, told CoinDesk.
Maximum bearishness does not necessarily indicate an immediate end to the downtrend. While prices may continue to decline, the pace is likely to slow, with a tactical bottom in sight.
“Prices can still fall further, as we saw in March when the indicator bottomed before Bitcoin continued to fall in April. However, Bitcoin still managed a 10% bounce immediately after that initial low sentiment. Now that sentiment is now near the bottom again, a similar rebound is possible in the short term,” Thielen explained.
Bitcoin was trading near $84,800 at press time, having hit a low of $80,880 on Friday, according to data from CoinDesk. Despite the rebound, prices are still down 10% on the week and 23% on the month.
