Bitcoin ( $24,650.00 ) (BTC) held above $41,000 into the weekend after a late surge Friday took the largest cryptocurrency to two-week highs.
BTC/USD 1-day candle chart (Bitstamp). Source: TradingView
“The only good bear is a dead bear”
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD maintaining newly re-won ground Saturday, with the pair’s correlation to stock makets firmly in focus.
Analysts had highlighted the $39,600 area as a key line to cross and flip to new support in order to secure further upside. In the event, this was no issue for bulls, as Bitcoin ( $24,650.00 ) “gapped up” in seconds as it neared $40,000 to continue higher.
Amid the newfound strength, the mood was conspicuously more buoyant than in recent days or even weeks.
Popular analyst Credible Crypto compared current action to Q4 2020, in which Bitcoin ( $24,650.00 ) challenged $12,000 prior to breaking three-year all-time highs.
Characteristic of a 1-2, 1-2 or start of a new impulse is strong moves up, shallow pullbacks, continuation. The first chart is from 11-12k before our breakout and run to 60k. The second chart is now, and what I expect to play out to further confirm our major 5th has started. $BTC pic.twitter.com/gDvt4hsQoq
— Credible Crypto (@CredibleCrypto) February 5, 2022
“The only good bear is a dead bear,” trader and analyst Pentoshi quipped as the market continued rising to spike to local highs of $42,000.
Others were less convinced of the sustainability of the current move, with data showing considerable large-volume selling beginning as $40,000 reappeared.
CT cheering about a break of 40k, but orders of size $100k+ are still selling this rip #BTC pic.twitter.com/IfACqoRBs5
— Material Scientist (@Mtrl_Scientist) February 4, 2022
As Cointelegraph reported, signs had already been circulating that an uptick was due, thanks mainly to the time-tested relative strength index (RSI) breaking a two-month downtrend in late January.
“Probably worth mentioning price is at historic levels of oversold to on-chain demand/supply, and the futures traders have halted their sell-down,” statistician Willy Woo commented while comparing similar RSI breakouts.
Fear lingers for wary hodlers
Turning to sentiment, the sense of caution characterizing the market since November’s $69,000 peak remained.
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According to the Crypto Fear & Greed Index, “fear” was still the overriding emotion among market participants, even after the price jump.
The Index, which uses a basket of factors to produce a nominal sentiment score from 0-100, measured 33 at the time of writing, having spent most of January below 25 — the “extreme fear” zone.
Nonetheless, the last time that the Index was so high was almost six weeks ago, just after Christmas.
Crypto Fear & Greed Index (screenshot). Source: Alternative.me