The fear, uncertainty and doubt is palpable today on bitcoin markets. It shouldn’t be as these large swings are nothing new and will happen time and time again. Yet still the panic ensues as traders quickly liquidate positions for fears of further losses. But are the whales doing the opposite?
Bitcoin Fear Index Hits 2019 Low
The BTC fear index, a measure of fear and greed, has plunged to a low not seen since the depths of crypto winter in 2018. A 245 day low was hit as the index plunged to 13 in terms of ‘extreme fear’. The last time it was this low was when bitcoin dumped to $3,200 in mid-December. The scale is zero to one hundred with the bottom indicating ‘extreme fear’ while the top end is ‘greed’.
The fall in the index correlated with the BTC dump below $10k which marks the fourth time since the rally began bitcoin has been in four figures. The platform derives its index data from five factors: Volatility, Market Momentum/Volume, Social Media, Surveys, Dominance and Trends.
Research director at The Block, Larry Cermak, observed that two thirds of Coinbase customers with large BTC holdings have actually been buying over the past 24 hours.
Interestingly, according to Coinbase’s data, 67% of customers with large BTC holdings (top 10%) are buying rather than selling in the last 24 hours. pic.twitter.com/mOfNMbscuc
— Larry Cermak (@lawmaster) August 15, 2019
He followed up with 88% of Coinbase customers with large XRP holdings are buying rather than selling in the last 24 hours. Considering that XRP prices fell to their lowest levels in almost a year over the past few hours, it would indicate a lot of ‘dip buying’ going on.
BTC Back Over $10k
The recovery is already in motion, for bitcoin at least. The foray into four figures only lasted seven hours as BTC is back over $10k again according to Tradingview.com. From the dip of $9,470, bitcoin has made over $500, or 6%, back to its current price of 00. Things happen so fast on crypto markets that most will have slept through this latest dip and missed the opportunity to get in at four figures.
In all likelihood there will be another chance though as several analysts have eyed a further dip resulting in a lower low below $9k. The price action over the rest of the day will be critical for BTC’s next move. If the whales have been accumulating it will be heading back upwards pretty soon. Unfortunately the same cannot be said for the altcoins.
Will bitcoin bounce back today? Add your thoughts below.
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