Earlier today, Bitcoin made some notable progress in relation to the huge price drop that it experienced on Sunday. Analysts have identified three potential support levels for Bitcoin, which included the $48,000 price mark. However, the price of Bitcoin has broken past the second support level and is trading around $49,000 at the moment.
Bitcoin Enters Fear Zone as Price Continues to Rally
According to Crypto Fear and Greed Index, a market sentiment tool, Bitcoin has dropped into the “fear” zone with a value of 38. This is similar to what happened last year September when Bitcoin reacted to U.S tech stocks.
Based on past data analysis, the “fear” period has always presented good buying opportunities. The sentiment surrounding the fluctuating market is a perfect study for measuring trader’s psychology. On January 8, when Bitcoin first hit the $42,000 price mark, the index rose to 93. However, following the drop of Bitcoin to $43,000, the index drastically fell to 38.
Institutional Investors Drive Bitcoin Price
In the past 24 hours, Bitcoin has moved up by 10.84%. As at the time of writing this article, Bitcoin is trading at $49,197. If the price continues to rally, the next hurdle for the price to break is the resistance level at $50,000. The rally has been linked to the increasing demand by institutional investors.
JPMorgan stated in its research note that the 4-week rolling average flow into Bitcoin funds has recently reversed. In a recent note to its clients, the bank advised investors to invest in Bitcoin. It stated that investing in the asset is going to help them “to achieve any efficiency gain in the overall risk-adjusted returns of their portfolio.”
While many countries are trying to provide a reliable framework for the crypto ecosystem, a region in China has declared war on crypto mining. The region said it will shut down all mining activities starting from April.