Bitcoin Posts Negligible Bounce, but Extreme Fear Suggests Larger Rebound in Store

"Crypto Fear & Greed Index offers tactical long opportunities" - Analysts

As per a recent update by Quinn Thompson, founder of digital asset hedge fund Lekker Capital, a local bottom could be near or at the current levels in Bitcoin prices. This analysis is based on the fact that U.S.-listed bitcoin ETFs saw their largest daily outflow since May 1, which interestingly coincided with a local bottom in bitcoin's price.

The Crypto Fear & Greed Index, which measures market sentiment, has offered tactical long opportunities during past low levels. For example, in early July, the index fell to 25 as BTC plummeted to $53,000 due to sell pressure from the German and U.S. governments and Mt. Gox distributions. However, prices climbed 32% to nearly $70,000 by the end of that month.

In early August, a crash to $49,000 pushed the index into the extreme fear zone of 17, following which bitcoin rebounded 32% to $65,000 in three weeks. Despite potential bounce, longer-term outlook remains murky due to growing concerns about the U.S. labor market and a possible recession that concurs with the Federal Reserve's forthcoming interest rate cuts.