- Bitcoin price has been in a strong bearish trend lately.
- The CBOE VIX index has been in a strong bullish trend
- The fear and greed index has moved to extreme fear.
The Bitcoin price is attempting to rebound after it crashed to a multi-week low on Monday. The BTC coin is trading at $38,716, which is a few points above the weekend low of $37,282. Other cryptocurrencies like Ethereum, XRP, and Solana have also been in an uneasy recovery mode.
Fear and greed index
Bitcoin has been in a strong bearish trend in the past few days as global volatility increases. The CBOE Volatility Index (VIX) has risen to the highest point this month as the Russian invasion of Ukraine continues.
As a result, the fear and greed index has moved to extreme fear section. It is currently at 13, which is the lowest level it has been in the past few months.
The Bitcoin fear and greed index has also crashed hard lately and is currently at 21. Historically, BTC tends to remain under pressure when there is increasing fear in the market.
The Bitcoin price crash has coincided with the overall sell-off of global equities. European indices like the German DAX and French CAC 40 have moved to a bear territory, meaning that they have fallen by more than 20% from their highs.
The same is true in the United States, where the Dow Jones, Nasdaq 100, and S&P 500 indices have fallen sharply in the past few months.
There are three key reasons for this crash. First, there are worries about the ongoing crisis in Europe, where Russia has continued its attack on Ukraine. In times of high risks, volatility tends to increase.
Second, the strong economic numbers from the US have pushed more investors to foresee a more hawkish Federal Reserve. Last week, data from the US showed that the country’s unemployment rate fell to 3.8%.
Finally, there are risks of stagflation in Europe and other markets as inflation remains at elevated levels.
Bitcoin price prediction
Turning to the daily chart, we see that the BTC price formed a double-top pattern at about $45,765 recently. Historically, a double-top pattern is usually a bearish sign. A closer look shows that the coin has fallen below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved below the neutral level of 50.
Therefore, there is a likelihood that the Bitcoin price will continue its bearish trend as bears target the next key support level at $35,000.
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