Bitcoin is up 42% since the start of 2023, but short term, the outlook may now favor the bears.
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The latest data paints a problematic picture for BTC price action — investors are greedy, but the mainstream is far from ready to buy.
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After January’s 40% surge, BTC/USD is having trouble reaching for resistance higher up the chart.
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As Cointelegraph reported, the pair spent the whole of February simply consolidating its prior gains, making it likely the least volatile month on record.
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Judging by current moves, however, that consolidatory phase may soon be over — but not work out in bulls’ favor.
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Cointelegraph takes a look at three issues that Bitcoin is currently contending with which have the potential to remain a thorn in the side of the bull run.
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Bitcoin hodlers feel the greed
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Crypto market sentiment received a serious, if unexpected, boost at the start of the year as Bitcoin and altcoins began trending higher.
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By the middle of the month, the mood had completely changed versus Q4 2022 — and monitoring tools were quick to show it.
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As BTC/USD reclaimed and held $20,000, disbelief soon turned to confidence that the “up only” return to form would continue — even as the pair encountered major resistance near $25,000 which remains unbeaten.
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Crypto sentiment is notoriously fickle, and even a modest trend change can upend the overall climate as investors become irrational — both in bullish and bearish terms.
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According to the Crypto Fear & Greed Index, that process may well be playing out again this year. The classic sentiment indicators, which uses a basket of factors to deliver a normalized sentiment score for cryptocurrency, recently hit its highest levels since Bitcoin’s November 2021 all-time high.
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This has implications — the higher the score, the more likely the market is behaving irrationally and is due for a correction.
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Fear & Greed spent much of 2022 in the irrational “extreme fear” zone, hitting rare lows of just 6/100 at one point. Fast forward to Q1 2023, however, and its reading is ten times higher, reflecting irrational “greed” as the overriding market force.
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Currently, the Index measures 51/100, characterized as “neutral.”
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Crypto Fear & Greed Index (screenshot). Source: Alternative.me
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Mainstream FOMO is nowhere to be seen
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If existing hodlers are too eager to bet on the good times continuing, outside the crypto sphere, conditions look very different.
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According to the latest data from Google Trends, hardly anyone is interested in finding out about Bitcoin at present, even after its blistering rally.
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Compared to the past five years, interest in the term “Bitcoin” is near its lowest recorded levels since mid-2020.
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The price may be higher, but for mainstream interest users, Bitcoin currently does not represent a reason for "FOMO," or even a topic worth investigating.
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If previous bull markets were characterized by an influx of new buyers, BTC price action arguably has a way to go before historical patterns repeat themselves.
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Google search data for "Bitcoin" (screenshot). Source: Google Trends
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Whales keep bull run in check
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Turning to short-term price charts, a cloud which appeared as part of the run-up continues to hang over bulls.
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This comes in the form of a concerted effort by large-volume exchange traders to guide spot price to serve their own aims — making a clean break with the long-term bear trend more difficult to secure.
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Cointelegraph continues to cover these whale liquidity areas, which monitoring resource Material Indicators has dubbed the “Notorious B.I.D.”
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Its owners have a habit of moving it, with price action behaving increasingly in line with its position on the Binance order book — behavior which has been classed as “manipulation.”
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BTC/USD order book data (Binance). Source: Material Indicators/Twitter
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“If BTC price approaches $23.1k, don't be surprised if some or all of the bid wall gets moved,” Material Indicators wrote in one of its latest Twitter updates alongside a chart showing the liquidity’s recent moves.
