Bitcoin dip amongst Fed concerns: Is this the end of the rally?

Cryptocurrency is trending on social media, going by the key words that have been focused on in the past seven days according to market data aggregator Sentiment. Furthermore, if the trending words are painting a picture, it’s one of purchasing cryptocurrency while the price sits dipped; following news that the Federal Reserve is cautious of crypto.

Over the past week, the word “sell” fell off the list of the top ten trending topics, and “dip”, “buy” and “fed” took the stage. Despite Bitcoin’s over 10% drop in the past seven days, panic selling might have cooled down and savvy investors might be looking to fill the gap and “buy” the “dip”.

Source: Santiment

Cryptocurrency sentiment following federal fear

Currently, according to the Crypto Fear and Greed Index, crypto sentiment is sitting at a score of 18, indicating “extreme fear” in the market. The past two days have also shown extreme fear. A week ago, the index read a score of 28, “fear”.

Bitcoin Fear & Greed Index

Crypto Fear & Greed Index, Source: alternative

In accordance with the index, some traders are concerned that the price of Bitcoin will plunge to a value as low as $30,000 USD – less than half of the trading value when Bitcoin reached its all time high in November. Crypto Ed, a popular crypto analyst on Twitter, noted that Bitcoin might go as low as September’s weakest values.

However, the market is not all gloom. Sentiment on social media remains strong, urging a strong buying trend. Bitcoin bulls tend to agree with the data that Sentiment is showing; that buying the dip is a way to take advantage of those selling Bitcoin amidst regulatory uncertainty. Several Bitcoin proponents believe that Bitcoin will see massive growth when investors in fiat are faced with inflation and that Bitcoin’s dip might be coming ahead of a major recession. Computer scientist and former Google employee Vijay Boyapati noted:

Currently, Bitcoin is hovering around $42,340 USD, a 1.8% drop in daily trading volume. Over the past month, its shed 16.2% of its value. Whether this is the end of the rally remains to be seen, but if the social sentiment is anything to go by, we might be in for a spell of volatility before the market stabilises in one direction or the other.

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