Bitcoin’s (BTC) current retreat now stands as the deepest correction of this market cycle, based on observations from an on-chain analyst.
At the same time, sentiment has tanked. Analysts disagree on whether the market is entering a prolonged downturn or if a bottom will form soon.
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Bitcoin Faces Deepest Correction of the Cycle as Fear Dominates Market
Bitcoin has continued to shed its gains in the past months. Yesterday, the coin dropped below $90,000, marking a 7-month low. However, a modest recovery followed.
BeInCrypto Markets data showed that it was trading at $91,460 at the time of writing. This represented a 0.109% increase over the past 24 hours.
Bitcoin Price Performance. Source: BeInCrypto MarketsOn-chain analyst Maartunn highlighted the magnitude of the pullback in a recent X (formerly Twitter) post. He pointed out that the depth of the correction is now the largest seen so far in the current cycle.
The decline has also shaken market sentiment. The Crypto Fear & Greed Index has remained locked in Extreme Fear for eight consecutive days as of November 19.
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Such a long streak signals that traders remain deeply cautious, with risk appetite at one of its lowest levels of the year.
The Crypto Fear & Greed Index. Source: X/Coin BureauSponsored
Analysts Divided on Bitcoin: Bear Market or Local Bottom?
Alphractal stated that extremely negative sentiment can mean two things. It can signal an upcoming local bottom during a bull market. However, in a bear market, such sentiment typically indicates continued downside. Notably, this is where analysts remain split.
Some argue that a bear market has started according to the 4-year cycle. In a detailed thread, Mister Crypto also outlined several arguments for why the bull market is over. He highlighted technical signals and cycle timing models that align with previous cycle peaks.
On-chain and behavioral signals support his view. He noted that old Bitcoin whales are selling, a Wyckoff distribution pattern has completed, and Bitcoin is beginning to lose strength versus the S&P 500, just as it did at the start of the last bear market.
Investor and trader Philakone even forecasted that BTC could drop as low as $35,000 by the end of next year. This stands in sharp contrast to the numerous bullish BTC forecasts analysts have been issuing all year.
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However, other analysts argue the opposite. They contend that this is not how bull markets typically end and believe Bitcoin may instead be carving out a bottom.
Institutional figures Tom Lee and Matt Hougan also suggest that Bitcoin may be forming a bottom, potentially as early as this week.
With opinions sharply divided, it remains unclear whether Bitcoin’s pullback marks the start of a deeper downturn or simply a short-term bottom. Only the coming time will reveal which side is right.
Source: https://beincrypto.com/bitcoin-bull-market-deepest-correction-fear-greed/
