Bitcoin may see a brief correction to the $72,000 support as an imminent market recovery remains limited by a lack of crypto investor sentiment, which has dropped to lows not seen since 2022.
Bitcoin (BTC) price hit an over three-month low of $78,197 on Feb. 28, falling over 28% from its record high of over $109,000 reached on Jan. 20.
Bitcoin may experience a deeper retracement toward the “low $70,000’s range as the market repositions,” according to Iliya Kalchev, dispatch analyst at digital asset investment platform Nexo.
BTC/USD, 1-day chart. Source: TradingView/Cointelegraph
Yet, a “significant drop below $75,000 seems less likely,” the analyst told Cointelegraph, adding:
“While there might be a temporary backtrack as the market fills in the gaps left during the rapid climb, Bitcoin is more likely to establish firm support in the $72,000 to $80,000 range.”
“This support could provide a foundation for a more sustainable recovery, reducing the likelihood of a deeper retracement,” he said.
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Other analysts also predicted a Bitcoin bottom near $70,000 in early 2025 before the next stage of the rally.
Based on its correlation with the global liquidity index, Bitcoin’s right-hand side (RHS), which marks the lowest bid price someone is willing to sell the currency for, may fall below $70,000 around the end of February after it peaked near $110,000 in January.
Source: Raoul Pal
The first warning of a correction to $70,000 came from Raoul Pal, founder and CEO of Global Macro Investor, in November, when he also predicted that Bitcoin would reach a “local top” above $110,000 in January, before the current correction.
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Crypto investor sentiment drops to 2022 low
While analysts expect Bitcoin to find its bottom and start a recovery in the coming weeks, the crypto market remains limited by a lack of investor confidence.
The Crypto Fear & Greed Index — which measures overall crypto market sentiment — fell to a near three-year low of 20, last seen in July 2022, Alternative.me data shows.
Source: Alternative.me
The last time investor sentiment dropped to similar levels was a month after Bitcoin fell to $17,500, experiencing a monthly decline of over 37% in June 2022.
BTC/USD, 1-month chart. Source: TradingView
The investor sentiment decline was caused by an array of external and crypto-specific factors, Bitfinex analysts told Cointelegraph, adding:
“Overall, the combination of a sharp Bitcoin price drop, regulatory uncertainty, security breaches, and declining altcoin valuations has led to extreme fear in the crypto market.”
“Although not a component of the index, we are also consistently seeing new highs in long liquidations across numerous flushes such as on Feb 3rd and the current 24-27th February move down,” the analysts added.
Meanwhile, the wider crypto market is still recovering from the $1.4 billion Bybit hack, which occurred on Feb. 21, marking the largest hack in crypto history.
In a positive signal for the crypto industry, Bybit has continued to honor customer withdrawals and had fully replaced the stolen $1.4 billion in Ether by Feb. 24, just three days after the attack.
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