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Market Wrap: Bitcoin Rises Even as Indicator Shows Extreme Bearish Sentiment

source-logo  coindesk.com  + 1 more 23 September 2021 21:40, UTC

Bitcoin is in recovery mode as some indicators suggest the sell-off is approaching oversold levels. For example, the relative strength index (RSI) on the daily chart is rising from oversold territory. But the bitcoin Fear & Greed Index is approaching extreme levels last seen in May, which is a bearish sign.

At press time, bitcoin was trading at about $44,800. It is up 3% over the past 24 hours, compared with a 4% rise in ETH and an 11% rise in Avalanche’s AVAX token over the same period.

Altcoins are outperforming bitcoin on the way up after they took a relatively bigger hit during the sell-off earlier this week, CoinDesk’s Lyllah Ledesma wrote.

Some traders have been buying the dip, especially long-term BTC holders, according to blockchain data. Still, some analysts remain skeptical of the recent rebound and expect BTC resistance at $47,000 to stall the upside.

Other traders remain active, seeking opportunities for investments that will outperform BTC by using options and futures strategies. “Over time, a lot of folks that deployed in crypto went for vanilla (passive) strategies, but saw that they could get more alpha and mitigate risk with active strategies,” crypto hedge fund BKCoin Capital said in an interview with CoinDesk.

Latest Prices

  • Bitcoin (BTC), $44,786, +3.5%
  • Ether (ETH), $3,144, +4.3%
  • S&P 500: +1.2%
  • Gold: $1,748, -1.1%
  • 10-year Treasury yield closed at 1.427%

Extreme market fear

Meanwhile, bitcoin’s Fear & Greed Index is sending bearish signals. Some analysts view that as a contrarian signal and expect bullish sentiment to return into the fourth quarter.

“Bitcoin lost its momentum before the greed level was hit, when another market crash happened, and the Fear and Greed Index fell right back into the fearful levels,” Arcane Research wrote in a report on Tuesday, highlighting the recent whipsaws in market sentiment.

Historically, extreme levels in the Fear & Greed Index preceded turning points in BTC’s price, like when it hit an all-time high of about $63,000 in April and sunk to a recent low at around $30,000 support in July.

Spot BTC volume remains muted as BTC consolidates below the $50,000 price level, suggesting bearish sentiment could take some time to wane.

Altcoin roundup

  • Altcoins rebound after sell-off earlier this week: Prominent tokens such as Cardano’s ADA, Solana’s SOL and Terra’s LUNA were up between 6% and 25%, CoinDesk’s Lyllah Ledesma reported. AVAX, the native token of the Avalanche open-source platform, added 24% to hit a record of $79.58, according to data from Messari.
  • Grape Network raises $1.2 million despite causing Solana outage: The project’s token sale caused a nearly daylong Solana outage last week, but Grape Network still pulled off a $1.2 million funding round that was led by Multicoin Capital. The venture funding comes on the heels of last week’s $600,000 public sale that was so overheated with bot-buyers that it knocked host blockchain Solana offline, CoinDesk’s Danny Nelson reported. “We didn’t break it out of intention,” Grape Network founder and core contributor Dean Pappas told CoinDesk in an interview. “But we were part of the reason it got broken.”
  • Miami Mayor Suarez says MiamiCoin going mainstream ‘faster than bitcoin’: In an appearance on CoinDesk TV’s “First Mover,” Suarez, who is working to attract crypto businesses to Miami, claimed MIA has “been mainstreaming significantly faster than bitcoin,” even though holders can’t yet buy anything with the token. People can “mine” MIA by sending STX, the native token of Stacks, to a smart contract, which forwards 30% of those contributions to a wallet reserved for the city, CoinDesk’s Helene Braun reported. Last month, the city voted to accept those funds, which are now worth $7 million. Suarez said Thursday the project is generating over $2,000 every 10 minutes for the municipality.

Relevant News

  • Twitter to Add Bitcoin Lightning Tips, NFT Authentication
  • Institutional Investors Preferring Ether Over Bitcoin Now: JPMorgan
  • Robinhood Testing Crypto-Wallet Feature in App: Report
  • Circle Taps Plaid for ACH Payments as USDC Market Cap Hits $30B

Other markets

All digital assets in the CoinDesk 20 ended the day higher.

Notable winners as of 21:00 UTC (4:00 p.m. ET):

  • Algorand (ALGO), +10.3%
  • Chainlink (LINK), +6.1%
coindesk.com

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