#BVL035: Loading...

Last week in BVL034, we laid out that Bitcoin was likely consolidating and would trade within a range. Price did dip slightly further than expected, but the broader outcome stayed as we forecast: price consolidated after a long period of dips, with the choppiness in price action largely confined to intraday swings.

We don’t normally comment on market psychology factors, but we will make an exception this week to recognize the backdrop against which this letter is written: The Fear and Greed Index hit an equal “All-time low” of 5 (Extreme fear). The last time fear was this high was 2019.

This week, our focus is on identifying whether the market is starting to stabilize under pressure. We’re watching two things closely: first, whether flows can stop deteriorating and begin to turn in a steadier way, and second, whether “capitulation” starts to ease.

The key question for this week is “Have we exited this period of forced selling, and if so for how long?”