Wednesday, December 7

Bitcoin tries to recover, but market remains extremely afraid

The price of Bitcoin rehearses a recovery in the market, which remains extremely scared despite the high this Thursday (30).

The price has suffered in recent days, falling in the market and reaching a weekly low on Thursday, when the fall came to test the region of US$ 45,900.00 in the market. In the Real pair, Bitcoin even sought the price of R$ 265,000, the lowest price in the last seven days.

With the recovery in the market, Bitcoin returns to trade at US$ 47,400.00 in Dollars and R$ 269 thousand per unit, a movement of quick recovery in face of a fall that threatened to worry.

Bitcoin Rehearses Recovery, But Extreme Fear Remains Present

A very common indicator among Bitcoin traders in the market is the Crypto Fear & Greed Index, which shows what sentiment is present.

In recent days, the fear of the market drew attention and worried many, but this Thursday (30), the feeling got even worse. This is because, according to the tool, the day is marked by Extreme Fear, which accompanied the most serious drop in the market in the last seven days.

Bitcoin Fear And Greed Indicator as of December 30, 2021 / Reproduction

With extreme fear, many traders tend to wait for new entries, which can represent an interesting time to observe possible entries. Even so, other more cautious traders may choose to sell their coins in order to avoid big losses.

Despite the extreme fear, the market is experiencing a recovery in the price of Bitcoin, in a week marked by the market’s fall since the beginning. The expectation now follows the annual closing of 2021, which will take place next Friday (31).

What caused the fall of the week?

One explanation for the recent market declines are fears over the closing of put options, which expire on December 31, and are expected to put pressure on the market until that happens.

Another plausible explanation is the drop in trading volume at the end of the year, a time marked by festivities and a time when traders move away from trading at brokerages.

A different and possible explanation was the winter ban on Bitcoin mining made by Iran, a country that already groups some companies and this may have made the market fear for the drop in the currency’s fundamentals.

Anyway, Bitcoin trading remains under the attention of the market, which lived glory days in 2021 and saw the digital currency consolidate itself as a store of value in the midst of the crisis. With a 77% return on 2021 consolidated in the Real pair, Bitcoin was the only protection against inflation in Brazil for investors, who saw inflation above 10% in the year.