Bitcoin Price Analysis: BTC/USD may extend the downside correction to $9,000

Bitcoin (BTC) is changing hands at $10,380 after a short-lived dip below 10,000 on Friday, September 4. The first digital currency has gained nearly 2% of its value in the last 24 hours and has stayed unchanged since the start of the day. Bitcoin's market share improved slightly to 56.7% form 56.3% on Friday. 

Speculators are scared

The fear and greed index reflects the growing anxiety among traders. The index that analyzes the market's current sentiment has switched from the extreme greed to fear in a matter of days as Bitcoin's price collapsed from $12,000 on Tuesday, September 1 to as low as $9,900 on Friday, September 4. 

The cryptocurrency market is the best example of herd behavior as people usually become greedy and tend to buy more when prices are rising. They become fearful when the market is flashing red. Extreme greed signals that the market is ready for a downside correction, while the extreme fear is often interpreted as a buying opportunity.

At the time of writing, the Fear and Greed Index sits at 41, which means that traders are getting nervous, though they are still far from panic, which means the price has room for further correction. 

BTC/USD: The technical picture

From the technical point of view, BTC/USD broke below the daily SMA50 and the upside trend line from the March 13 low of $3,886. This bearish signal implies that the price may continue moving down to at least $9,000. This psychological barrier has the potential to slow down the bears as it is reinforced by the daily SMA200 that has supported the price since the end of April. 

Meanwhile, a sustainable move above the broken trend line locate don approach to $11,000 will negate the bearish scenario and allow for an extended recovery towards $12,000. 

BTC/USD daily chart