BTC Fear and Greed Index shows great anxiety. Can it create a new trend in July?

From the surge to $60,000 at the beginning of the year, to the consecutive plunges on "519" and "619", Bitcoin successfully staged a roller coaster market in the first half of 2021. The "surge and plunge" have attracted the most attention, and the trend of this round of market is a topic of great concern to all investors.

From the perspective of market sentiment, cryptocurrency analyst Nicholas Merten recently analyzed the Fear and Greed Index. He said that when the Fear and Greed Index shows great optimism and excitement, it is usually a good time to sell. On the contrary, when the index shows great pain and anxiety like it is now, it is usually a good buying opportunity.

In addition, market analysis shows that Bitcoin's continued decline and correction are strikingly similar to the price trend from June to December 2019. Market analysis platform TradingShot pointed out that the recent formation of a bullish divergence, coupled with a rebound from the 50-week moving average support level, may once again push Bitcoin prices up to the 61.8% level of the current Fibonacci retracement level. In the chart provided by TradingShot, the 61.8% Fibonacci level appears near $47,500. At the same time, another chart above shows a profit target close to $50,000.

On the institutional side, on-chain analyst Will Clemente said that long-term Bitcoin holders increased their positions significantly this week. Since the end of May, the illiquid supply of Bitcoin has been growing steadily. Among them, long-term holders increased 120,739 BTC, while new investors decreased 97,333 BTC.

SBF, founder of crypto trading platform FTX, said in an interview that he is still optimistic about the future development of the market and believes that institutions are still entering the crypto field, but the process will be very long and cautious. In addition, Julian Emanuel, head of BTIG equity and derivatives strategy, set the investment target of Bitcoin at $50,000 by the end of this year. He said that after the price of Bitcoin plummeted by 30%, many institutions are buying this cryptocurrency.

Glassnode data also showed that the supply of Bitcoin held by whales (holding 1,000 to 10,000 BTC) increased by more than 80,000 to 4.216 million BTC on Friday, reaching the highest level since May. The data remained basically unchanged on Saturday. In addition, the number of whale entities also jumped to a three-week high of 1,922. The re-accumulation of whale entities is good news for the market because whales played an important role in driving Bitcoin from $10,000 to nearly $60,000 in the five months ending in February 2021.

It is reported that the number of Bitcoins held by whale entities has risen in tandem with prices during the bull market, reaching a record high of 4.542 million on February 8. Therefore, the recent increase in the number of Bitcoins held by whales indicates that the market may have bottomed out.

In addition, Pantera Capital CEO Dan Morehead said that the panic in the crypto market is basically over following the market-wide crash in May. Morehead said that the market fell mainly due to the combination of three events: news about China's crackdown on digital assets, Elon Musk's attention to Bitcoin, and US Tax Day. Morehead believes that current indicators show that the market has "experienced most of the panic" and will not go down again.

It is worth noting that according to Willy Woo, an on-chain analyst, while the price of Bitcoin is hovering between $30,000 and $40,000, the user growth of the Bitcoin network continues to climb and is now "close to its historical high." He said that more and more people are entering the market, and users holding less than 1 BTC are buying BTC. Willy Woo added: "The whales and dolphins with 100 BTC in their wallets are hoarding, no one is selling, and there is a specific type of holder who is also constantly buying and does not tend to sell too much." Willy Woo calls this type of user "Rick Astley," who has been "very, very active" in 2021.

Despite the positive data from multiple parties, the market direction is not absolute, said Rob Levy, co-founder of the cryptocurrency prediction market Hxro, as the market searches for direction. Levy warned that Bitcoin and the entire market could still go lower.

It is worth noting that JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a report that the spot premium in recent weeks is a negative signal pointing to a bear market, and Bitcoin's relatively low share in the total crypto market value is another worrying trend. According to Coingecko data, Bitcoin currently accounts for 42% of the total crypto market value, down from 70% at the beginning of the year. In this regard, JPMorgan strategists said that Bitcoin's market share may need to exceed 50% before it can be more easily considered that the current bear market is over.

In addition, Mizuho Securities analyst Dan Dolev also expressed concerns, and he also pointed out that he is not optimistic about Coinbase (COIN) stock due to concerns about the state of the crypto market. He expects that the "lingering crypto winter" will lead to a decline in Coinbase's revenue.