Bitcoin Bounces Back: Is a New Bull Run Looming Amid “Extreme Fear” in the Market?

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After a big crash in the crypto market on Monday, August 5, things are starting to look up. Bitcoin’s price has climbed above $55,589, which is a 12.2% increase from its lowest point yesterday. This improvement is due to the US futures market, which has shown signs of recovery and brought some hope back to investors.

At the same time, veteran trader Peter Brandt is feeling positive about Bitcoin. He thinks that the recent drop in Bitcoin’s price looks similar to what happened after the 2016 halving, which came right before the big bull run in 2017.

Is Bull Run On The Horizon?

The comparison to the 2015-2017 cycle is significant because it ended with a historic bull run, where Bitcoin hit record highs. Meanwhile, Brandt’s observation suggests that, despite recent setbacks, Bitcoin might be on a similar path that could lead to future gains.

However, in a recent tweet post, Brandt highlighted that in 2016, Bitcoin’s price dropped from $650 to $474, a 27% fall after the halving, before soaring to $20,000 by December 2017.

Please note that $BTC decline since halving is now similar to that of the 2015-2017 Halving Bull market cycle pic.twitter.com/cIm3WKzBog

— Peter Brandt (@PeterLBrandt) August 5, 2024

Looking at Bitcoin’s current scenario, the price has decreased by 26% from its post-halving high of $64,962, Brandt views this as a potentially bullish sign. 

Bitcoin has seen a significant drop similar to 2016, but this time, it has fallen by 26%, bringing the price down to around $49,050 from its peak of $70,000 in late July. However, the cryptocurrency has shown resilience, recovering to $56,000 in early trading on August 6.

Bitcoin In “Extreme Fear” State

The BTC price chart showed gains of 4.82% over the past day, reaching $55,848.13. The 24-hour low and high were recorded at $49,121.24 and $56,271.37, respectively.

Meanwhile, the Crypto Fear and Greed Index has entered the “Extreme Fear” zone for the first time in two years, coinciding with outflows of $168.4 million from U.S. spot Bitcoin exchange-traded funds. 

On August 5, the index, which gauges market sentiment for Bitcoin and the broader cryptocurrency market, dropped to a score of 17 out of 100, the lowest since July 12, 2022.