Bitcoin has been able to make a resurgence in recent weeks. The 25,000 USD barrier was recaptured by Bitcoin prices just two days ago, marking the first time since June 13th.
Bitcoin Poised For New Rally
In June, Bitcoin had its largest monthly decline since 2011, falling over 37.3% to a final value of $19,925. Since then, it has partially recovered its value and today saw its first test of $25,000.
Bitcoin continues to rule the charts despite being down 46.5% from its previous high, but its dominance has decreased to slightly under 40% as opposed to more than 50% a few months ago.BTC/USD trades slightly below $24k. Source: TradingView
However, Bitcoin has been relatively peacefully fluctuating horizontally over the past two weeks between $22,500 and $24,500. At the same time, recent weeks have seen a significant recovery in both commodities prices and stock markets. As a result, the overall financial markets are experiencing the anticipated summer rally.
Since attitude had reached a severe panic state in the middle of June as a result of the financial markets’ steep, month-long decline, perception among participants has greatly improved during the course of the most recent rebound. This in and of itself is a well-known bear market pattern. However, it won’t be known whether and how the bears will return until around mid-September.
Over the previous four weeks, the Crypto Fear & Greed Index has made remarkable progress. The sentiment is still largely scared, though. Fear still permeates the cryptocurrency industry seven months after the devastating sell-off.Crypto Fear & Greed Index, as of August 11th, 2022. Source: Lookintobitcoin
The feeling of being defeated permeates the wider picture as well. There are several excellent contrarian opportunities in this setting.
Overall, there is still a contrarian buy signal due to the scared mindset.
Sharp declines in the financial markets would be extremely detrimental to retain the current administration in office given the midterm elections on November 8th in the US. As a result, only a slight decline in the financial markets in September would be more likely. The markets could then rise from those lows until the American election.
Since November 2021, the equity and cryptocurrency markets have been under intense pressure for months, but a broad rebound has now been going on for little over four weeks. The Nasdaq Composite, which is heavily weighted toward technology, has increased by over 20% from its low on June 16th as a result of this procedure, adding over $420 billion to its market value. This would imply that the bear market is officially over.
Related Reading: Bitcoin Price Trades A Little Over $24,000, Can It Target $27,000?Featured image from Getty Images, chart from TradingView, and Lookintobitcoin