Bitcoin Struggles To Hold $60K – Fear Index Hits 20 As Bulls Face 15% Correction Risk

Bitcoin

Bitcoin (BTC) has once again surged past the critical $60K mark, igniting hopes of a sustained bullish rally. However, this momentum was fleeting, with BTC quickly retracing below support and trading at $59.8K at the time of writing. This price action has stirred up market anxiety, and Bitcoin’s notorious volatility has returned, leaving both bulls and bears in a tug-of-war for control over key support levels.

Market Sentiment – Fear Creeps Back In

Bitcoin‘s Fear and Greed Index, a crucial barometer of investor sentiment, has recently slipped into the “fear” territory. Historically, a reading below 20 on the index has signified extreme fear, often coinciding with market bottoms. In these periods, new investors typically rush in to buy Bitcoin at discounted prices, while short-term holders (STH) scramble to exit, hoping to break even before the price drops further.

Currently, the index suggests moderate fear, which may indicate a cautious market. If this trend holds, a price bottom could be on the horizon, giving investors an attractive opportunity to buy the dip. However, the battle between bulls and bears is intensifying, with fear potentially pushing the market toward a correction.

Short-Term Holders – A Threat to the Rally?

Recent analysis points to short-term holders (STH) as a critical factor in Bitcoin’s current price action. According to AMBCrypto’s data, a surge in the negative net position of STH often signals a market top, which is usually followed by a sharp pullback. These short-term holders tend to sell as Bitcoin approaches resistance levels, contributing to the bearish pressure.

Contrary to the hope that $60K could become a solid support level, this STH activity suggests that the $60K–$61K range might actually serve as a resistance zone. If bulls fail to maintain their grip on this level, Bitcoin could retrace further, possibly dipping to the $51K support zone before any meaningful correction takes place.

Long-Term Holders – The Key to the Top?

While short-term traders are wary, long-term holders (LTH) have been quietly building their positions. These large investors have played a crucial role in keeping Bitcoin afloat near $60K, suggesting that the level could eventually turn into a strong support zone. AMBCrypto’s analysis of the netflow ratio shows that it has doubled to 0.30%, indicating increasing support from large hodlers.

This shift could present an opportunity for the bulls, especially if the $60K level is solidified as a new bottom. However, much of this potential hinges on the actions of long-term holders, who have the capital and patience to challenge the current fear-driven market narrative. If they continue to bolster their positions, Bitcoin could stabilize and turn $60K into a launching pad for the next leg of its rally.

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With Bitcoin hovering just below the $60K mark, the market is at a pivotal moment. Fear and greed are driving short-term volatility, and the actions of both short- and long-term holders will likely determine Bitcoin’s next move. If bulls regain control and long-term holders continue to support the price, BTC could break free from its current consolidation. But if fear prevails, a deeper correction could be on the cards, with the $51K support level being a key area to watch.

For now, all eyes are on Bitcoin’s ability to turn $60K into a solid foundation or face a potential retreat to lower levels.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

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