Bitcoin has fallen out of favor with investors as capital rotates into the booming stock market amid the ongoing artificial intelligence boom. BTC was trading at $60,000 on Sunday, slightly above this month’s low of $58,040.
Despite these headwinds, there are signs that the cryptocurrency could rebound, with the Crypto Fear and Greed Index plunging to 17—a level that has historically signaled extreme fear and, at times, preceded market recoveries.
Crypto Fear and Greed Index Has Slumped to 17
A contrarian case can be made about Bitcoin despite the worsening sentiment. This sentiment is evident in the fact that spot Bitcoin ETFs have had the worst performance this year. The funds tracked by SoSoValue shed over $1.7 billion last week, the worst weekly performance on record.
Investors have redeemed positions worth over $4 billion this month, bringing the two-month outflows to over $6 billion. They have lost billions of dollars this year, with cumulative net assets exceeding $51 billion. They now hold assets worth over $72 billion worth of assets.
These ETF outflows jumped after concerns emerged that Michael Saylor’s strategy would need to sell its Bitcoin holdings as its preferred stocks, like STRC and STRD, dropped. Strategy has already sold 32 coins earlier this month.
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There is also the ongoing rotation from Bitcoin to the stock market, as evidenced by inflows into DRAM, a memory-focused ETF. Its assets have jumped to over $24 billion since its launch in April this year. ETFs tracking the Nasdaq-100 and S&P 500 indices have added billions of dollars in assets this year.
Yet, amid this doom and gloom, the Bitcoin price may be about to bottom. One of these catalysts is the Crypto Fear and Greed Index tumbling into the extreme fear zone at 17. It has dropped from the greed zone of 57 earlier this year. In most cases, Bitcoin often does well whenever the index falls into the fear zone.
Another possible catalyst is that crude oil prices have been in freefall this month following the US-Iran ceasefire agreement.
Bitcoin Price Prediction: Technical Analysis
The daily chart shows that the BTC price has formed a double-bottom pattern at $60,000. This pattern had a neckline at $67,225, its highest point on June 15 this year.
The Percentage Price Oscillator (PPO) has formed a bullish divergence, a common bullish reversal signal in technical analysis. Therefore, there is a likelihood that the price will rebound, potentially to the key resistance at $67,223.
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