Bitcoin (BTC) sentiment is seeing its first major test of its peak this year as the upside dries up.
The start of trading on Wall Street on March 30th failed to trigger a new rally in the BTC/USD pair, which threatened to lose support to $47,000.
From “extreme fear” to “greed” in one week
Having gained nearly 30% since March 14, Bitcoin has managed to hold the annual opening price as support, which was previously the resistance ceiling of the trading area throughout 2022.
Now, however, hopes for a pullback appear to have been fulfilled as momentum shows signs of fatigue – at least temporarily.
Data from Cointelegraph Markets Pro and TradingView were recorded on March 30 with $48,000 currently proving to be stubborn for the bulls.
Hourly BTC/USD light chart (Bit Mark). Source: Trading View
Traders are looking at the possibility of a back test of the support but still not sure how far it will go “too low” and ultimately threaten the trend at all.
Popular Crypto Ed trader has set $45,000 as a key retracement area in the event of a broader draw, but this is still less than the key annual opening of $46,200.
In his latest YouTube update, he added that an accident there and an advance of about $40,000 is “suspicious”.
When you look at the Crypto Fear & Greed Index, the need for lead time becomes even more apparent. In less than a week, his normal score rose from 22/100 (extreme fear) to 60/100 (greed), the highest level since mid-November.
After the local peak, the valuation has already begun to decline towards the “neutral” zone, which stood at 56/100 as of March 30.
Crypto Fear & Greed Index (screenshot). Source: Alternative.me
The inflationary nightmare scenario unfolds
When analyzing the emotional issue, social media users cited macro forces at work, which traditionally mean the problems of those who take risks, arguing that enthusiasm for Bitcoin has increased.
Related: Bitcoin Reaches 3-Day Low as Terra Buys BTC Below $48K
They argue that the highest inflation rate in 40 years and interest rates close to zero provide an environment conducive to risk.
However, a look at the gold markets may show that this trend is not going anywhere, despite the central bank’s measures to curb inflation.
The materials scientist, creator of the materials index for blockchain analysis, notes that the gold futures offering has followed a “non-functional” path previously predicted by former BitMEX CEO Arthur Hayes.
Hayes warned that gold would rise sharply when it became clear that saving in large fiat currencies was a bad bet.
In the same article, Hayes said that Bitcoin will eventually benefit from the chaos by breaking away from traditional stocks.
“Gold price >$10,000 is psychologically shocking to global asset markets. With global asset allocators now thinking primarily of inflation and real returns, any hard financial assets that are believed to protect portfolios from this plague will be offered at astronomical levels,” he wrote. .
“It is this mindset shift that breaks Bitcoin’s relationship with traditional risk-reliant assets such as US stocks and nominal interest rates.”