- Australian crypto trader and analyst Jason Pizzino believes that extreme fear has permeated the market, leading to the current crash we are experiencing.
- The Fear and Greed Index hit its lowest reading in this cycle, suggesting a potential rebound is on the cards as investors snap up “discounted” projects.
- Altcoins have largely performed poorly since April, with Pizzino believing that the “altcoin season” hopes of earlier this year may have to wait.
It’s been a rocky ride for crypto HODLers this past month. After the dizzying heights of a new BTC ATH, spot Ether ETF approval and institutions like VanEck and BlackRock flocking to the scene, the market has endured a weeks-long crash.
Earlier in the week, Bitcoin fell to its lowest price point since February at around US $53k (AUD $78k). The coin has recovered somewhat but is still down 12% in the past seven days of trading.
So what’s behind the current slump, and can the market correct its course or will there be more blood on the streets? Aussie trader Jason Pizzino weighed in on the current state of crypto.
Related: Crypto Banter Sees Silver Lining in Bitcoin Dip, Suggests Potential for Market Rebound
Fear and Greed Index at Lowest Point in this Market Cycle
Crypto has always been a heavily sentiment-driven market. When things are going well, hype swells and coins can go through the roof in just hours of trading. Unfortunately, the same is true for when bearish conditions enter the fray – fear spreads among the community like wildfire.
According to Jason Pizzino, at one point during the recent correction, the Fear and Greed Index read 26, the lowest level of this cycle, indicating extreme fear. This is a big roadblock for crypto’s path back to ATHs. Investors are scared and unwilling to take on riskier assets.
At the same time, such an extreme reading indicates that the market may have oversold Bitcoin (among other tokens), signalling a potential rebound in the coming months.
Altcoins May Take Longer To Recover From Post-April Slump
Pizzino also touches on the altcoin performance over the past couple of weeks. While Bitcoin’s fall-off captures most of the headlines, several prominent projects are enduring a worse time of it. Popular tokens like Ethereum, BNB, Near Protocol and Polygon are down more than 15% in the last week alone.
The Aussie analyst suggests that altcoin weakness has penetrated the market and that it may take some time for many of them to recover. Ideally, investors could use this time to cut projects without resilience and consolidate their portfolios at lower entry costs.
Related: Crypto Banter Sees Silver Lining in Bitcoin Dip, Suggests Potential for Market Rebound
It’s not all doom and gloom though, according to Pizzino. The trader identified two potential outcomes of the current crash – with the more likely being a V-shaped recovery. Higher highs and higher lows are a telltale sign of a V-shaped price movement, with Pizzino suggesting Bitcoin may again find a ceiling at US $64k (AUD $94.7k) on its way back to an ATH.
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