‘Extreme fear’ grips Bitcoin price, but analysts point to signs of a potential reversal

The cryptocurrency market settled into a holding pattern on May 25 after traders opted to sit on the sidelines ahead of the midday Federal Open Market Committee (FOMC) meeting where the Federal Reserve signaled that it intends to continue on its path of raising interest rates. According to data from Alternative.me, the Fear and Greed Index seeing its longest run of extreme fear since the market crash in Mach 2020.

Crypto Fear & Greed Index. Source: Alternative

Data from Cointelegraph Markets Pro and TradingView shows that the price action for Bitcoin (BTC) has continued to compress into an increasingly narrow trading range, but technical analysis indicators are not providing much insight on what direction a possible breakout could take.

BTC/USDT 1-day chart. Source: TradingView

Here’s a look at what analysts think could come next for Bitcoin price.

Whales accumulate as Bitcoin battles to reclaim $30,000

BTC/USDT 15-minute chart. Source: Twitter

According to market analyst Michaël van de Poppe, “#Bitcoin broke through $29.4K and ran towards the next resistance zone. If we hold $29.4K, we’ll be good towards $32.8K. Finally.”

One interesting thing to note at these price levels is that while the predominant sentiment is that of extreme fear, on-chain intelligence firm Santiment pointed out that whale wallets have taken this as an opportunity to accumulate some well-priced BTC.

Bitcoin price vs. supply distribution. Source: Santiment

Santiment said,

“As #Bitcoin continues treading water at $29.6K, the amount of key whale addresses (holding 100 to 1k $BTC) continues rising after the massive dumping from late January. We’ve historically seen a correlation between price & this tier’s address quantity.”

Price could still pull back to $22,500

A macro perspective on how Bitcoin performs following the appearance of a death cross was offered by pseudonymous Twitter user Rekt Capital, who posted the following chart outlining what to expect if the “historical price tendencies relating to the #BTC Death Cross repeat […]”

BTC/USD 1-week chart. Source: Twitter

Rekt Capital said,

“$BTC will breakdown from the Macro Range…..

Source

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