Bitcoin’s price fell to a four-week low of $65,500 on Friday, pushing market sentiment back into ‘extreme fear’ according to the Fear and Greed Index. Analysts from Santiment suggest this pervasive negative sentiment could paradoxically set the stage for a relief rally, as bitcoin has historically moved opposite to crowd expectations. The cryptocurrency also risks tying its longest-ever streak of negative monthly returns if it closes March below approximately $67,000.
Bitcoin declined to $65,500, marking its lowest point in four weeks after facing rejection at the $72,000 level days earlier. This price action has driven the overall market sentiment back into what is classified as ‘extreme fear’ territory.
The analytics firm Santiment has indicated this shift in sentiment could be a necessary ingredient for a price recovery. “Historically, crowd FUD is a needed ingredient for a relief rally because markets move opposite to the crowd’s expectations,” the firm stated.
Data from CoinGlass shows bitcoin is nearing an unwanted historical record for consecutive monthly losses. If it closes March below roughly $67,000, it will match a six-month negative streak last seen between August 2018 and January 2019.
Following that previous six-month downturn in 2018/2019, bitcoin subsequently embarked on a significant five-month rally. The month of May 2019, in particular, saw the asset’s price surge by 52%.
