The crypto market has crashed this month, erasing over $1.2 trillion in value. Bitcoin tested the important support at $80,000, while the Crypto Fear and Greed Index moved to the extreme fear zone. This article explores when the crypto market go back up.
Crypto to Go Back Up Amid Oversold Conditions
History suggests that crypto markets emerge from bear market conditions when they move to the oversold conditions. This happens as investors start to buy the dip, hoping for a rebound.
Fortunately, there are signs that the crypto industry has moved into the oversold level. The Relative Strength Index (RSI) of the Crypto Market Cap excluding stablecoins has tumbled to the oversold point of 25. Similarly, the two lines of the Stochastic Oscillator have moved to extreme oversold levels.
Crypto Fear and Greed Index to be in Extreme Fear Zone
History shows that most crypto bull runs start when there is extreme fear and panic in the market. Data shows that the Crypto Fear and Greed Index has slumped to the extreme fear zone of 11, meanin that a rebound could be near.
A good example of this is what happened in March and April of this year when Bitcoin price plunged. This crash coincided with the Crypto Fear and Greed Index moving to the extreme fear zone. After a short while, Bitcoin rebounded and hit a record high in May.
Therefore, while it is too early to predict, there is a likelihood that a new crypto bull run is about to happen.
Potential Bitcoin Price Double-Bottom Pattern
The ongoing crypto crash started when Bitcoin formed a double-top pattern. This is a common pattern characterized by two peaks and a neckline. In this case, the two peaks were at $124,215 and the neckline was at $107,125.
Similarly, a crypto rebound will happen when Bitcoin forms a double-bottom, which resembles letter W. This happens when the coin forms an initial low, rebounds, then retreats to the initial bottom. Such a pattern will likely lead to a new Bitcoin rebound.
Macro Catalysts
On top of this, there will need to be a potential macro catalysts for the new crypto bull run to start. One possible catalyst that may push Bitcoin and other cryptocurrencies higher is a clear sign that the Federal Reserve will cut interest rates.
Other potential catalysts are Donald Trump’s $2000 stimulus deal, the Supreme Court ruling against Donald Trump’s tariffs, and a return to quantitative easing.
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