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  • Bitcoin’s Greed and Fear Index dropped to the lowest level since September 2019.
  • BTC/USD is dangerously close to the critical support of $7,200.

Bitcoin’s Greed and Fear Index hit the level of extreme fear. Currently, the index value is registered at 14, while a value of 0 means an absolute fear, and a value of 100 means absolute greed.  Currently, the index is lowest since September 2019, when it was 12.

Financial markets tend to be very emotional and susceptible to herd behavior. Cryptocurrency markets are no exception here. Moreover, considering that this is a young and still immature industry, people tend to become very greedy when prices are rising and easily hit the panic button when the prices go down. These sentiments usually increase pressure and create excessive market movements. 

However, extreme fear may signal that people are excessively worried, A strong collapse of greed and fear index usually followed by a significant recovery, followed by price growth, which creates a buying opportunity on the market. 

BTC/USD: Technical picture

Meanwhile, Bitcoin’s technical picture does not look particularly good at this stage. A sustainable move below $7,700 triggered protective and stop orders and attracted more sellers to the market. According to Intotheblock data, only 52$ of Bitcoin addresses are in the money at the current stage. The next strong support area is created by SMA100 weekly at $7,200. A move towards this level will push another 1 million accounts towards a breakeven point, which means they might want to cash out to protect the wealth. If this is the case, the sell-off might start snowballing with $7,000 becoming a possibility sooner rather than later.

On the upside, the recovery above $7,700-$7,800 will help to mitigate the initial bearish pressure and allow for the move towards $8,000. Considering a failed attempt to settle above this barrier, Bitcoin bulls are likely to have a hard time on the approach to this resistance level, which may push BTC into a consolidation pattern. Anyway, a move away from the recent lows will help to ease the panic and create a pre-condition for further recovery.

BTC/USD daily chart

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