- Sentiment among crypto investors has been “fear” and “extreme fear” for most of 2022, according to the Crypto Fear & Greed Index.
- Bitcoin inflows from private wallets now account for 40% of total inflows across exchanges, signaling a rise in selling pressure.
- Analysts observe Bitcoin recently completed its sixth red weekly candle, and the price could plummet to $28,000.
Amidst the broad crypto market bloodbath, analysts have identified key metrics that indicate further drop in Bitcoin price. BTC price has consistently dropped after hitting an all-time high six months ago, hinting at the possibility of crypto winter.
Bitcoin price could bleed as crypto winter arrives
The “Crypto Fear and Greed Index” by Alternative.me is considered a key indicator of investor sentiment. The indicator compiles data on volatility, market momentum, social media surveys, Bitcoin dominance and trends.
The sentiment, therefore, reflects the attitude of investors towards a cryptocurrency. Since sentiment can influence traders, it is used for short-term price predictions.
The index reveals for a large portion of 2022, the sentiment in market participants has been “fear,” and “extreme fear.”
Crypto Fear & Greed Index
The sentiment has remained largely unchanged since January 2022, alongside a general slump in sentiment on stocks. A prolonged period of falling prices and negative market sentiment is indicative of crypto winter.
In early 2018, crypto winter set in, Bitcoin price plummeted 85%, and altcoins continued to bleed. Lark Davis, a leading crypto analyst, recently observed that Bitcoin closed its sixth consecutive red candle. The last time this occurred was in 2014, ahead of a Bitcoin bear market.
#bitcoin has just completed its 6th red weekly candle.
— Lark Davis (@TheCryptoLark) May 9, 2022
The last time this happened was 2014!
That's crazy man! pic.twitter.com/kWdBiPA5th
The source of Bitcoin inflows to exchanges is another critical metric used to identify an upcoming trend reversal or a shift in trader sentiment. Inflows from private wallets were lower than 10% across exchanges. This number has hit 40% with a massive spike in exchange BTC inflows from private wallets.
Philip Gradwell, chief economist at Chainalysis, believes this metric reveals that there is a rise in selling pressure on Bitcoin across exchanges.
Private wallets are now 40% of exchange bitcoin inflows rather than the typical 10%, which means there is a lot of extra sell pressure - and it is a similar story for ETH... pic.twitter.com/Vxfj7fF8p7
— Philip Gradwell (@philip_gradwell) May 9, 2022
Peter Brandt, legendary veteran trader recently predicted Bitcoin price drop to $28,000. While analysts like @rektcapital believe Bitcoin price could plummet lower, @Nebraskangooner, advisor at PrimeXBT, argues Bitcoin price could recover if the asset sustains above the $32,000 support level. The analyst notes that, for now, Bitcoin price is at lower support areas.
Everyone still super bearish calling for $28k.
— Nebraskangooner (@Nebraskangooner) May 9, 2022
Yes it could happen.
But we just dropped straight from $43k and $32,000 was my lower support so I'm not going to be uber bearish unless we break through that.
For now we assume we're at lower support areas.
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