Fear & Greed Index Returns to Neutral Level Thanks to BTC – Analysis, 2 Aug
The Crypto Fear & Greed Index has returned to a neutral level because Bitcoin has been able to regain the psychological level of $40,000 per one digital coin:
That has been the index’s highest level since May 12th, which is a signal that the bullish sentiment is returning to the market:
From a fundamental point of view, the change of market sentiment is taking place because of the continued positive crypto news and events. For example, starting from August 2nd, the German institutional funds (the so-called Spezialfonds) will be allowed to invest in crypto and hold up to 20% of their assets in cryptocurrencies. According to Bloomberg, these German funds currently manage about €1.8 trillion ($2.1 trillion). And if 20% of this money goes to the cryptocurrency market in the next couple of years, it is an additional €360 million ($420 million) for the crypto industry.
But not only the number of institutional investors is increasing; the number of cryptocurrency users is growing exponentially as well. According to Crypto.com, the global crypto users surpassed 220 million in June that is more than twice the number of users at the beginning of the year:
After another positive week, the Monday market starts with a small price pullback. According to Coin360.com, one Bitcoin costs €33,578.25 (-4.23%), one Ethereum – €2,182.14 (-0.04%), one DOGE – €0.1746 (-0.36%), and one UNI – €18.84 (+0.27%):
Source: Coin360.com (Daily crypto market performance)
Now let us analyze the price charts of the leading cryptocurrencies against the euro in the most noteworthy time frames.
In the monthly time frame (MN), BTC/EUR formed a bullish candlestick for July that has covered the body of the previous small candlestick:
Also, the bullish candlestick has a local high slightly above the local high of the previous candlestick and a local low slightly above the previous one. We consider this an additional signal confirming that the sentiment is starting to change from bearish to bullish.
In the daily time frame (1D), BTC/EUR has been able to surpass the 90-day Moving Average (MA 90) and, now, is starting to test the upper bound of the consolidation:
In our view, if BTC/EUR exits the consolidation range, then this may mark the beginning of the uptrend renewal.
In the weekly chart (1W) of ETH/EUR, after the last Bullish Engulfing, a bullish candlestick has formed. This candlestick has a local low above the previous one and a local high above the previous one as well:
The sequence of Bullish Engulfing patterns plus the last bullish candlestick confirms that the bulls are trying to regain control over the market.
That is why if in the daily chart (1D) ETH/EUR pulls back to the neckline of the Double Bottom and after that rebounds, many traders will open long positions:
Please note that the conservative traders will enter the market only if during the rebound from the neckline, the price surpasses the last local high as shown in the price chart.
In the daily time frame (1D), DOGE/EUR is consolidating at a 30-day Moving Average (MA 30):
Let us have a look at the three different scenarios. The first one is the bullish one. In this scenario, the bullish sentiment will return to the market, and the bulls will push the price up to the 90-day Moving Average (€0.25). In the second scenario – the neutral one, the price will continue to move sideways at the 30-day Moving Average (€0.17). In the third scenario, the bearish pressure will continue, and the bears will push the price further down to the 360-day Moving Average (€0.09).
In our view, at the moment, all three scenarios are equally likely.
In the weekly chart (1W), UNI/EUR has formed another small bullish candlestick:
Interestingly, this candlestick has a local high above the previous one and a local low above the previous one. That increases the chances of a price rebound. That is why it is worth keeping an eye on the 4-hour chart (4H) where UNI/EUR has gone through the resistance line and is now forming a Double Bottom:
According to the chart, right now, the price is testing the neckline of the Double Bottom. If the price goes above the neckline, this will be an additional signal that the bulls are trying to retake control over the market and resume the uptrend.
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