Analysis: Bitcoin market sentiment hit an all-time low; contrarian investors believe $60,000 is the bottom for BTC.
PANews reported on February 10th, citing Cointelegraph, that the Bitcoin market sentiment index has fallen to an all-time low, with some contrarian investors believing that $60,000 may be the bottom of this cycle. Data shows that the cryptocurrency fear and greed index fell to a record low of 7 over the weekend, indicating the market is in a state of "extreme fear." Michaël van de Poppe, founder of MN Capital, pointed out that this indicator, along with the Relative Strength Index (RSI), shows the market is deeply oversold, similar to situations seen during the 2018 bear market and the March 2020 pandemic-induced market crash, potentially creating conditions for a rebound. A CoinGlass liquidation heatmap shows that a rise in Bitcoin price of approximately $10,000 could trigger over $5.45 billion in short position liquidations, while a drop to $60,000 would only trigger $2.4 billion in liquidations. This imbalance could drive short covering.
However, structural risks in the market remain. CryptoQuant data shows that Bitcoin is still well below its 50-day and 200-day moving averages, with a Z-score of -1.6, indicating that it is still in a phase dominated by selling pressure. Net buy/sell volume in the derivatives market has turned negative, and Binance's buy/sell ratio has also fallen below 1, showing strong selling pressure in the futures market. Analysts point out that stronger spot demand is needed to trigger a sustained rebound. Looking at a longer timeframe, historical data shows that Bitcoin bear market bottoms typically form below the 0.618 Fibonacci retracement level, which is currently around $57,000. If history repeats itself, the downside scenario could extend to $42,000.
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