Bitcoin (BTC) is showing early signs of stabilization after a volatile fortnight, with sentiment shifting from outright fear to cautious neutrality.
According to some market watchers, this latest mood may be an indicator that traders are weighing up the possibility of a rebound against lingering economic concerns.
A Measured Shift in Sentiment
According to analyst Maartunn, as of September 3, the Crypto Fear & Greed Index, a popular sentiment gauge, has moved from a state of ‘Fear’ to a more neutral reading, hovering between 39 and 46.
This subtle but important change is a sign that the intense selling pressure that drove BTC from its August 14 peak of $124,457 per CoinMarketCap may be cooling down. The asset briefly dipped to $107,500 earlier this week before bouncing back above $111,000.
Other observers have pointed to a fragile equilibrium. As noted by on-chain analytics provider Bitcoin Vector, the recent correction has been relatively shallow. Their data, sourced from Glassnode, shows only about 9% of Bitcoin’s supply is currently held at a loss, a far cry from the 25% seen at the cycle’s local bottom in April or the over 50% typical of full bear markets.
This could mean that while the pullback was sharp, it hasn’t yet caused the widespread capitulation that is often needed to set a strong market bottom.
Price Action and Macro Pressures
At the time of this writing, Bitcoin was trading at around $110,700, a tiny 0.3% nudge upwards on its value in the last 24 hours. However, the current price reflects a 3.2% drop over the past month, pushing BTC almost 11% below its recent all-time high. Nonetheless, the OG crypto still maintains a substantial 87.6% gain over the past year.
Analysts say that the asset’s immediate battleground is the $112,000 level. If it breaks above this price, it could mean strength, but if it doesn’t, it could mean a deeper test of support near $105,000.
Meanwhile, this technical fight is happening in a complicated macroeconomic setting. A lot of people think that the Federal Reserve will cut interest rates at its meeting on September 17. However, some experts, like Doctor Profit, have warned that the market’s reaction to lower rates could be bearish if long-term borrowing costs remain high, which could be a sign of deeper economic uncertainty.
Still, there are others that still believe that the possibility of a looser monetary policy could keep Bitcoin’s price from dropping too much in the near future.
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