Bitcoin price breaks three-month downtrend line, indicators imply bullish shift in sentiment
- The Bitcoin Fear & Greed Index has moved into the orange zone, implying that investor outlook on BTC is bullish.
- Jack Dorsey proposes Universal Basic Income powered by Bitcoin could boost demand for the asset.
- Bitcoin price crosses $41,000, adding $170 billion to the crypto market capitalization overnight.
- Analysts note that Bitcoin price broke a long diagonal downtrend after three months, $41,000 remains key level.
Bitcoin price rally added billions to the crypto market capitalization overnight. Proponents consider $41,000 a key level for Bitcoin price uptrend.
Bitcoin price breaks diagonal downtrend line after three months
The Bitcoin Fear & Greed Index is considered a reliable indicator of a shift in investor sentiment in the crypto market. The indicator read 37/100, the first move out of the red zone from December 2021.
Bitcoin Fear and Greed Index is 37 - Fear
— Bitcoin Fear and Greed Index (@BitcoinFear) February 6, 2022
Current price: $41,402 pic.twitter.com/BRYXtgLMfJ
The reading implies that investor outlook has turned bullish on Bitcoin for the first time in 2022. The index hit its lowest point this year in January when it indicated extreme fear at 8/100. As the indicator climbs, investor sentiment becomes less fearful.
As investor sentiment on Bitcoin shifts, the asset crossed $41,000 overnight, breaking a long downtrend. Bitcoin price's rally to $41,000 added $170 billion to the crypto market capitalization.
Another factor fueling investor sentiment is Jack Dorsey’s proposal to power Universal Basic Income (UBI) with Bitcoin. Dorsey proposed Bitcoin-based UBI to Aarika Rhodes, a US congressional candidate, in a recent Twitter space chat.
I’m very excited to host a Twitter Spaces on UBI and #Bitcoin with @jack.
— Aarika for CA-32 (@AarikaRhodes) February 2, 2022
Joined by: @PrestonPysh @nic__carter @ODELL @Dennis_Porter_ @bigmarh @ck_SNARKs
February 4th at 6:45 PST. Click the link below to add to your calendar: https://t.co/Vvl1YgYWrI pic.twitter.com/MgtXg81Shl
Analysts have evaluated the Bitcoin price trend and noted that $41,000 remains the key level for Bitcoin price. Will Clemente, the Lead insights analyst at Blockware, believes that Bitcoin price is eyeing $47,000. Clemente has set a major target of $58,000 for Bitcoin price.
Pretty straightforward price action-wise for BTC.
— Will Clemente (@WClementeIII) February 5, 2022
Bidding green box(es); would like to see a higher low set for continuation. Flip the 40-41k area as support and can start eyeing 47K which is PoB in confluence with yearly open and STH realized price. Final major area is 58k. pic.twitter.com/jJqs5qe8tB
FXStreet analysts have predicted a Bitcoin price relief rally to $43,000.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
