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The “extreme fear” surrounding Bitcoin’s dip below $30,000 is highlighted by a tumble in sentiment in both crypto and traditional markets.
After losing support on Tuesday, Bitcoin (BTC) failed to reclaim $30,000 as Fear & Greed indexes rushed to the basement.
BTC’s price stays below $30,000 waterline
Data from TradingView showed BTC/USD continued trading in the $20,000–$30,000 zone on Tuesday.
The world’s largest cryptocurrency had a wild night, quickly adding to existing losses to end the day with negative returns of -6 percent.
The move coincided with a deterioration in sentiment in traditional markets. On Tuesday, the Fear & Greed Index, which measures market sentiment using a variety of criteria, plummeted into the “extreme fear” zone, scoring 17/100.
Simultaneously, the cryptocurrency equivalent, the Crypto Fear & Greed Index, raced to catch up, plunging to 19/100, which is also known as “severe fear.”
Last month, crypto Fear & Greed hit new lows of just 10/100, while the traditional counterpart’s score has halved in a week.
Perhaps predictably, traders were more than cautious.
“Rejects $32.3K, Rejects $31K, and now at the next support zone,” Cointelegraph’s Michaël van de Poppe warned.
“No real run of volume yet, through which the liquidity tap should still happen or we’ll see a test at $24K for Bitcoin.”
On Monday, fellow trader and analyst Rekt Capital summed up the grim picture on spot markets, concluding that downside was more likely to prevail. In the event, BTC/USD fell almost exactly to his target zone.
“BTC has lost Weekly support (black) and convincingly lost the blue 50-week EMA,” he summarized on Twitter alongside the relevant chart.
“BTC has failed to preserve the bullish momentum that originated in the green box. In fact, sell-side pressure may mount on BTC and may force a return to the green area soon.”
Altcoins double daily losses
A look at buy and sell positions on major exchange Binance, meanwhile, showed support remaining in place between $27,000 and $29,000 despite the price dip.
Resistance, on the other hand, was thin below $35,000, providing a silver lining for bulls hoping for a swift rebound should the market find fuel for a U-turn back above the $30,000 mark.
As Bitcoin plummeted, altcoins exacerbated existing weakness, with many of the top 50 cryptocurrencies by market capitalisation losing 20% of their value in a week.
On Monday, the largest altcoin, Ether (ETH), lost its longer-term 2021 uptrend and continued to trade below $1,800.