Bitcoin, the current bullish momentum is facing an obstacle
Bitcoin chart analysis
The bitcoin price stopped at $ 44,400, and now we see consolidation at that level with a smaller withdrawal to the current $ 43,725. This zone coincides with the December minimum of 43,600, and we can say that we are now testing that level in the hope that the price will overcome this obstacle. Bitcoin has support in the MA20 moving average, while our MA50 moving average is around $ 45,000.
- We need to continue this positive consolidation that would continue on the bullish side.
- Our next resistance zone may be around $ 46,000, which is our previous support zone from December.
- If the price continues to recover, the following targets are at $ 48,000 instead of the previous upper consolidation, then the resistance zone of $ 50,000-52,000, the December obstacle to the bullish trend.
- We need a negative consolidation to pull the price back towards the support zone at 42000 and MA20 moving average.
- In the following, we can go to the zone of this year’s minimum at $ 39,696.
- If the bearish pressure remains in force, the price will easily break and form new lows this year.
El Salvador is at a loss on bitcoin
According to estimates made by Bloomberg, El Salvador President Nayib Bukele has cost the state money by betting on Bitcoin. Relying solely on Bukele’s frequent posts on Twitter that he bought Bitcoin, the Salvadoran president bought 1,391 Bitcoins. Those purchases cost approximately $ 71 million, based on an average of $ 51,056 per Bitcoin. Assuming the government still holds all of this Bitcoin, the total amount acquired is now worth approximately $ 59 million at today’s prices. Of course, these losses are only on paper if Bukele did not sell anything from Bitcoin. That means that Bukele’s Bitcoin purchase in El Salvador cost about 12 million dollars of public funds.
The fear and greed index
The fear in the crypto market is now the biggest in the last six months, which indicates that now may be the time to buy Bitcoin. According to the latest weekly report from Arcane Research, the index of fear and greed reached lower values this week since July. The Fear and Greed Index is calculated the general mood around Bitcoin and the broader crypto market. Metrics use a numerical scale from zero to one hundred to represent feelings. When the values are below fifty, the market is currently scared.
Values above 50 imply that the market has become greedy. Extreme values below 25 and above 75 indicate extreme fear and extreme greed. Such extreme values usually occur around the bottom and top. Therefore, some traders believe that it is best to sell in times of extreme greed and buy more cryptocurrencies like Bitcoin while feeling extreme fear.
Warren Buffet believed in this idea, as his famous quote suggests: “be timid when others are greedy, and greedy when others are afraid.”
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