May 18, 2022 05:15 AM ET
By: AnalysisWatch
Bitcoin has been hovering around the 30K mark for a second day, forcing the rest of the crypto market to balance declines and gains. Ethereum has lost 1.2% in 24 hours but remains near 2,000. The top ten altcoins are mostly down, losing between 0.7% (DogeCoin) and 3.8% (Polkadot). Tron is up 1.7%, but is little changed since the end of last week. Total crypto market capitalization fell 1.1% overnight to $1.29 trillion, according to CoinMarketCap. Bitcoin's dominance index remained unchanged at 44.3%.
The Cryptocurrency Fear and Greed Index rose 4 points to 12 by Wednesday and remains in "extreme fear." The index's recovery from the lows since 2019 is due to an easing selloff, but not a market reversal to growth. Bitcoin has stalled at the psychologically significant 30K level and has also lost the momentum of the recovery at the 76.4% Fibonacci line from the late March downside to last Thursday's lows.
This is a typical shallow counter move. If the market is unable to go on the offensive from current levels, the question is whether the ultimate downside target could be the 161.8% area of this move, which is $11.3K. Such a setback would wipe out all the upside momentum from October 2020. So far, this scenario looks extraordinarily pessimistic and must take into account the disappointment of crypto-neophytes in addition to an actual collapse of the global economy and stock market. Such a collapse would result in the Bitcoin price being as low as 16% of its peak, which has happened several times in Bitcoin's history.