Bitcoin (BTC) Touches $64,000 Price Height, But Will the Leading Crypto Asset Unlock New Heights in the Near Term?

This week, bitcoin (BTC) touched a price height of $64,000 before retracing its steps to a current price mark below $62,000.

Bitcoin (BTC) price opened the week with a bullish ascent to the $64,000 price level before retracing its steps to trade below the $62,000 mark. This price downtrend raises the question – will the leading crypto asset unlock new heights in the near term?

Bitcoin at a Critical Psychological Turning Point

Past market observations have shown that traders tend to get pessimistic when their BTC holdings show losses after a sharp price decline. On the other hand, investors are optimistic when their BTC portfolio is in the green zone.

The CryptoQuant analyst highlighted that the leading cryptocurrency now sits between a “critical psychological turning point and a zone of optimism,” a stage where the psychology of market participants can either drive or plunge bitcoin’s movement. Highlighting the need for BTC to remain in the optimism zone, the analyst noted:

“Historical data shows that maintaining stability in these critical zones is crucial for the continuation of bull markets. Notably, the ‘Supply in Profit’ metric, which shows the period when investors are in profit, suggests that optimism tends to rise when a large portion of the supply is in profit. Bitcoin’s current price levels are now testing this zone of optimism.”

Past market cycles saw bitcoin trade steadily between these two zones, as the analyst pointed out, leading to continuous price uptrends. The CryptoQuant analyst added that as long as BTC remains in its optimistic zone, its price could soar to new local highs.

Will BTC Remain Optimistic?

While bitcoin proponents are hoping for a bullish market trend, there are a few reasons why BTC may fail to live up to its much-expected growth. Here’s why:

Bitcoin’s Fear and Greed Index Suggests Otherwise

Despite bitcoin bulls aiming to push the leading crypto asset to new all-time highs, the Fear and Greed Index begs to differ. After bottoming out at a value of 10 during the March 2020 COVID-19 market crash, BTC’s Fear and Greed Index has been steadily rising throughout the year.

As of press time, the Fear and Greed Index shows a value of 74, which falls within the “Greed” zone. Past market observations have shown that when the Fear and Greed Index spends extended periods in the “Greed” zone, the market tends to correct itself with a strong bearish downtrend.

Hence, while bitcoin bulls may be optimistic about the market continuing its bullish uptrend, the Fear and Greed Index suggests that a market correction may be on the horizon.

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