- Despite the correction to $100k, sentiment was not overly fearful
- Analysis revealed that a dip to $92.5k is possible if the fair value gap fails as a demand zone
Bitcoin’s [BTC] price drop from nearly $112k to $101.3k, at the time of writing, saw the market sentiment turn towards fear.
In fact, while on-chain metrics reflected cautious optimism, Bitcoin and the wider crypto market lacked momentum.
Source: Alternative.me
The aforementioned readings underlined greed last month, but they have turned neutral and fearful recently.
Now, while it is concerning, the sentiment is not as bad as what was seen in April. At press time, the fear and greed index showed that participants did not expect deeper corrections. Could that be the reason why we will witness a drop to $92k next?
Are the fear and greed index trends warning investors?
Source: CoinStats
The bullish sentiment persisted for nearly two months. However, it has sunk towards neutral levels lately.
It may be beginning to resemble March too. A sustained drop below the $98k-$100k range could shift sentiment even more bearishly.
A technical analysis of the weekly chart revealed that the $97.9k-$100.7k (white box) range is a fair value gap. It is expected to serve as support in the coming days. It has already been defended during the weekend’s price drop.
Further FUD in the traditional markets could pave the way for a Bitcoin fall below $98k. However, as things stand, the bias remains bullish after the market structure break in May.
The Fibonacci retracement levels highlighted $93.2k, $88.8k, and $82.5k as the support levels in case $98k is ceded to the bears. Additionally, the OBV did not highlight overwhelming selling pressure on the weekly chart.
Source: Coinglass
The 6-month liquidation heatmap showed that $92.6k would be an attractive price target. In light of the uncertain macroeconomic situation, a correction to $94k might be possible. The liquidity cluster could pull the price lower too.
Investors and traders need to be wary. Without significant demand, a bullish reversal from $100k could be difficult. The market structure on the 1-day chart has flipped bearishly already. Once sentiment is sufficiently fearful, Bitcoin might begin to recover.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
