Bitcoin has seen some lackluster price action in recent times, struggling to garner any decisive momentum in either direction as both buyers and sellers reach an impasse.
The cryptocurrency does appear to be positioned to make another big movement in the near-term as its consolidation phase persists.
One factor that could have some influence over which direction Bitcoin goes next is the fact that its investors are growing increasingly greedy.
This sentiment shift is rarely positive for BTC – as it often acts as a counter indicator that suggests it will see some near-term downside.
Analysts are also noting that the benchmark cryptocurrency is currently in a precarious position from a technical perspective as well.
These factors all suggest that it is poised to see downside in the days and weeks ahead.
Bitcoin Investors Grow Greedy as Price Consolidates Around $9,700
Earlier this week Bitcoin incurred some massive momentum that caused it to rally up to highs of $10,400 before reeling to lows of $8,600.
From this point BTC was able to post a sharp rebound, and it has since been trading sideways around $9,700.
At the time of writing, it is trading down marginally at its current price of $9,740. It did attempt to post a breakout rally yesterday, but it met heavy resistance around $7,800.
From a fundamental perspective, growing positive sentiment amongst the cryptocurrency’s investor base seems to indicate bears may have the upper hand over bulls.
Arcane Research spoke about this in a recent report, explaining that investors are growing increasingly greedy as BTC ranges below $10,000.
They note that movements into the “greed” range tend to be short-lived.
“The Fear & Greed Index has been ranging between neutral and greedy lately… The greedy periods have been short-lived, and something investors should monitor if we finally stabilize above the neutral state,” they said.
Image Courtesy of Arcane Research
This doesn’t necessarily mean BTC will see any sharp short-term decline, however, as the cryptocurrency could still climb higher and trap more buyers before dipping lower.
BTC’s Technical Outlook Weakens
Technical analysis may support the notion that the cryptocurrency is poised to see some further near-term downside.
One trader recently explained that he is still waiting for Bitcoin to set fresh 2020 lows, offering a chart showing a massive descending trendline that has been leading it lower over a year-long period.
“BTC 3D TF- Still eyeing new lows patiently in 2020.”
Image Courtesy of Escobar
While looking at the chart he offers, it does appear that the cryptocurrency is positioned to decline first towards $7,900 before finding any strong support.
It could then decline even lower if this support is not ardently defended by buyers.
Featured image from Shutterstock.
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