Bitcoin Fear and Green Index Newsletter. Block 2
Welcome to the first issue of Bitcoin Fear and Green Index Newsletter. It’s very much a community-driven effort, and we all hope to see this newsletter grow with quality insight and analytics from the community members. Read till the end to learn how you can participate as well.
Current Bitcoin Fear and Greed
This week’s Technical Analysis
What a week this has been for Bitcoin. By breaking the $50,000 level, Bitcoin did what many thought was impossible for this cycle. But before we get to that, there is important data that needs to be shared so let's take a look at the chart above and discuss the significance of what's taking place.
After the big dump on May 19th, Bitcoin struggled to break above the 21 day moving average for the next 2 months. With several failed tests and 1 fake-out, the price remained in a bearish consolidation period without any technical hope for a trend reversal. That is until July 23 when Bitcoin was finally able to break above the 21 MA and induce a strong upswing trend that is still ongoing as of this writing. And ever since that break we have seen Bitcoin successfully test and bounce off the 21 MA a total of 3 times, with this past week holding the third test. I write this to shed a light on the significance of the 21 day moving average when it comes to tracking the short term trend of the price and how breaking above or below it can determine in what direction the price could potentially go for the next couple of months.
Now taking a closer look at this past week, the 23rd of August was clearly a great day for Bitcoin as it managed to break above the significant $50,000 level. Even though the price only held that level for several hours, the fact that Bitcoin was capable of breaching 50k speaks volumes in regards to the strength of this trend when considering that the price was at $29,000 only a little over a month ago. A couple of days later on the 26th the price saw a strict pullback from $49,300 all the way to $46,300 (right on the 21 MA), in turn also creating the biggest daily red candle body ever since the start of this trend reversal. But interestingly enough on the 27th, the price action took a complete reversal and recovered nearly every cent of what was dumped the day before by perfectly bouncing off the 21 MA back to $49,100.
As Bitcoin continues to create higher highs and higher lows, it could become increasingly difficult not to expect the trend to continue. However, if we zoom out and look at the macro weekly chart, it opens our eyes to just how green the market has been over the past 5 weeks with Bitcoin closing 5 strong weekly candles back to back. That is not to say that the price can't go up from here, but more to highlight over the fact that if we do indeed get a modest red weekly candle close (any close under $49,239), that it wouldn't change anything regarding this trend and it's to be expected sooner or later.
TA review by @CryptoSulta21
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