‘Extreme Fear’ Is Back but Bitcoin’s Price Recovery Depends on it: Santiment

Bitcoin dipped to a four-week low on Friday at $65,500 after it was rejected at $72,000 a few days earlier, which pushed the overall market sentiment back to ‘extreme fear’ territory.

However, the analysts from Santiment believe this could be the precise push BTC needs to stage a notable recovery.

Fear Dominates

CryptoPotato has repeatedly reported over the past few months that the Bitcoin Fear and Greed Index has been predominantly in an ‘extreme fear’ state, which was quite expected since the asset plunged by over 50% in months from its October ATH to the early February bottom.

However, there was some relief on the matter in the last 10 days or so, when BTC tapped $76,000 on March 18 and $72,000 a week later. Nevertheless, the subsequent rejection drove it south once again, dropping to $65,500 on Friday for the first time since the beginning of the month.

This meant that BTC, which was once the top-performing non-oil asset after the war against Iran began, had erased almost all gains charted within that period. The Index followed suit, as it dropped back down to ‘extreme levels,’ currently showing 9.

According to Santiment, this could actually be a blessing in disguise. The analytics company has doubled down on its belief that BTC tends to move in the opposite direction of what the crowd expects from it, which could drive the next leg up.

Record Chasing?

With just a few days left in March, bitcoin is close to equaling a painful record. Data from CoinGlass shows that its longest negative streak of consecutive months closed in the red stands at six, marked between August 2018 and January 2019. If BTC ends March below approximately $67,000, where it’s currently positioned, it will tie that record, as it has been deep in negative territory since October.

History shows that BTC went on a notable run after the previous such occasion in 2018/2019. In fact, it had five consecutive months in the green, with four of them charting double-digit gains. May 2019 stands out as its best-performing month since then, with a massive 52% surge.

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