Bitcoin News Today: Bitcoin Surges Past $114k as Fear Index Hits 28, Marking Volatile Crossroads

Bitcoin (BTC) has rebounded above $114,000, yet the Crypto Fear & Greed Index has plummeted to 28, its lowest level since mid-April, signaling pervasive market fear despite the price recovery. This divergence highlights ongoing volatility and uncertainty in the crypto sector, driven by factors including leveraged liquidations, macroeconomic data, and divergent technical analyses.

The recent price action saw Bitcoin briefly surpass $114,000, supported by a bullish inverse head-and-shoulders pattern on daily charts. Analysts noted that a successful breakout above the $113,000 neckline could target $120,000, with the 50-day simple moving average (SMA) at $114,700 acting as a near-term resistance. However, the market faced a $1.1 billion liquidation event earlier in the week, wiping out leveraged long positions and triggering a sharp drop in sentiment. The CoinMarketCap Fear & Greed Index, calculated using price momentum, volatility, derivatives activity, and social trends, fell to 28, indicating extreme fear. This aligns with historical patterns where extreme fear often precedes contrarian buying opportunities, though caution remains warranted.

Market participants are split on the near-term outlook. Fabian Dori of Sygnum Bank emphasized that while sticky inflation data—Personal Consumption Expenditures (PCE) rose 2.7% year-over-year—supports a Fed easing narrative, the labor market’s softness complicates rate-cut expectations. Meanwhile, 21Shares strategist Matt Mena argued that excessive leverage has been flushed out, with long-to-short ratios in BTC, SOL, and DOGE now at 1:9, setting the stage for a potential short squeeze. Conversely, Wincent’s Paul Howard warned of further declines, citing Bitcoin’s drop below its 100-day moving average and the total crypto market cap falling below $4 trillion as signs of fragility.

Technical analyses present conflicting signals. The inverse head-and-shoulders pattern, confirmed by Bitcoin’s surge past $113,600, suggests a bullish reversal, while the Bollinger Bands on monthly charts indicate compressed volatility, typical ahead of major price moves. However, the RSI on weekly charts remains below historical peaks seen in late 2023 and early 2024, raising questions about momentum sustainability. Traders like CrediBULL Crypto highlighted that corrective waves often linger in extreme fear territory (<25), implying a potential near-term bottom before the next impulsive phase.

The interplay between macroeconomic factors and technical indicators underscores the market’s complexity. While the Fed’s rate-cut expectations and a potential “soft landing” scenario could bolster risk assets, Bitcoin’s correlation with equities—particularly the S&P 500—adds another layer of uncertainty. A breakout above $113,500 could reignite bullish momentum, but sustained weakness below $110,000 might delay a recovery. Analysts also noted that Bitcoin’s seasonal strength in Q4, historically linked to post-halving cycles, could amplify gains if the technical setup resolves favorably.

In summary, Bitcoin’s price rebound coexists with heightened fear metrics, reflecting a market at a critical juncture. While contrarian indicators and technical patterns suggest potential for a reversal, macroeconomic risks and lingering liquidity concerns necessitate caution. Investors are advised to monitor key levels, including $113,000 and $110,000, as well as upcoming U.S. inflation data, which could influence the Fed’s policy trajectory and, by extension, crypto market dynamics.