Bitcoin: The Sentiment Trap Most People Fall For

本站添加: 2026-05-09

[00:00:00]The Bitcoin chart has recovered a lot from the February lows, but we are far away from all-time highs. Whereas the indices, the NASDAQ, the S&P 500, they are in all-time high territory. So, in this update, we want to talk about how high this rally could go. We'll also take a look at an important sentiment indicator, the fear and greed index.

[00:00:19]Very interesting to me because we use Elliot waves already to identify market sentiment. And if we can combine that with one of the more established sentiment indicators in the crypto space like the fee and greed index, then this whole analysis can become even more powerful. Now, in yesterday's update, I showed you the time cycles. If you're interested in that, check it out because Elliot wave is a price-based model. Um, but time cycles have to come from other calculations or models. So, if we combine these, it becomes even more powerful. In this video, we want to talk about sentiment and also want to talk about what actually is typically the sentiment you would expect from an Elliot wave point of view in such a corrective rally in a typical crypto winter. And I hope we all agree that we are in a crypto winter or a bare market.

[00:01:12]So we will talk about that and then yeah we'll talk about the overall structure here. So first of all we are in what we call a so-called Bwave. Now from an Elliot wave point of view which is the main model of analysis that we are using um corrections unfold in three-wave structures. So we had this initial decline into the February lows and then here the bounce and there should be another move down that gives me a three-wave move. It is just a larger version of the pattern that unfolded from the October high also a three-wave move down. So it gives you a good idea how these corrections typically play out. Um the whole you know the my goal here in these videos is to make you familiar with how markets work to help you understand how markets work. But you see it in a bull market. Yeah. You you see it in a bull market those three-wave movements to the downside they are naturally very small. But can you see it is always a three-wave move in an uptrend. Yeah. Always. You always get even here tiny three-wave movements. You always get these three-wave movements in an uptrend. So the, you know, in an uptrend, small corrections are three-wave movements to the downside because a three-wave move is not a main trend. Yeah. It's just a corrective pullback. Markets breathe in, they breathe out in a larger downtrend. Yeah.

[00:02:39]Obviously, that three-wave pattern is larger because it is embedded in a much larger uptrend. Yeah, because also a much larger uptrend. The long-term Bitcoin uptrend, which is still intact, obviously needs to be corrected. And as long as those movements to the downside predominantly unfold as three-wave structures which then turn into larger three-wave structures, we are still in a higher time frame bullish structure.

[00:03:08]Where it will get a bit concerning is if we see actual fivewave declines. But if it is a three-wave decline, everything is okay. It just means it's a larger correction.

[00:03:19]You know, exactly what we see in bull markets as well. just in bull markets those three-wave movements to the downside they are much smaller. Yeah. So it's just a question of scale but the behavior is always the same. So and that is why I want to talk a little bit about market sentiment today because in these movements in bull markets in the pullbacks you also see basically a small version also in terms of market sentiment which is based on fear and greed the two basic emotions in financial markets. Look, there's a small version of that. What you see there in small and what you feel probably yourself you see here in large as well.

[00:03:59]So it is very important to understand in order to make the right decisions in markets very important to understand how do these waves, these patterns, how do they make you feel? What is a market trying to do here? And so please note that the assumption here has not changed in months. Yeah, already in Q1 I highlighted up here I made my Q1 update.

[00:04:22]These are the quarterly updates that I give you guys that we should get one more low and then a rally. That rally is unfolding. I reinforced that early in April when I recorded the Q2 update that we should go higher. The resistance area was on the chart already back then. So really the assumption here has not changed at all on the Bitcoin chart. Um, I just want everybody to understand that this is still seen as a corrective rally right now. It can turn into something more bullish. I explained in detail in previous updates how that would look like, what that would mean. But in this video, I want to focus on the sentiment and why many people get trapped in such a Bwave and how the fear and greed index can also help us and how it actually supports the current thesis that this is likely just a corrective rally which can still extend higher. Absolutely. And we talked about the target area here.

[00:05:14]Around about 82 to 94K is my initial target area. We're nearly there before we then get a sell off maybe from May, June onwards, as it often happens in midterm years. And then if we talk about downside targets, I mean it depends exactly on where the Bwave tops. We can't really, you know, define targets yet. All I can do is to use the current high that we have here and then the C-wave down would take us to around about 38K. Now, if you think that's a madeup number, it's not. It is exactly what Bitcoin is always doing. Okay, not always, but most of the time because again, I just showed you how you have waves within waves and these are just fractals. And what you have here in small, this initial ABC move down from the high in 2025, we have here in large.

[00:06:05]And what did Bitcoin do when it moved down from the October high? We moved down, formed that Awave in small. We moved up in a Bwave, and then it reached the 100% extension like magic. I know it seems like magic, but it's actually just sentiment. Again, that takes us back to the fear and greed index. I'll explain that in a minute, but it's just sentiment. Sentiment decides when the market is ready for a reversal and um very often around the 100% extension. So if the B wave tops here, we move down.

[00:06:37]There is it. There it is around 38K.

[00:06:40]Very, very powerful. Doesn't mean we have to stop exactly there. But you know why this is so magical? If we just go back, the daily chart did not even close below this 62k area um in February. Very very powerful. So I would say let's take a look at the fear and greed index. And keep in mind that the current bounce is seen as a Bwave. So let us navigate to the fear and greed index here in our terminal. Um by the way for those of you who are interested very very shortly I'll make this um I'll make this early access version of our terminal available to our gold members on Discord. This is something very new I plan to expand on.

[00:07:21]At the moment we have four indicators live here. The seasonality app, seasonality screener. Um, we've got the fear and greed index and search interest, but that will be expanded more. Those are all indicators I'm using over the years. People have asked me again and again, can you show additional indicators? Can you make them available?

[00:07:39]And that's my plan. This be will be an additional benefit to our gold membership and you guys can get early access. If you're interested to join, feel free to check out the links in the comments section. It's just important that you join as a gold member and then in the next few days you'll get the link there. So anyway, what we look here for or what we look at here is the fear and greed index and I'm going to zoom in a little bit to the current uh fear and greed action. Um so first of all the fear and greed index is currently at 39 in fear. Okay. So the you could say we are still in fear mode. We're not in greed mode. So while I see from time to time more and more actually bullish comments in the uh comment section and so on, we still have a majority of people I think agreeing that we are in a bearish market. But that is probably not bullish enough yet for a Bwave. Um now again this is current correction right?

[00:08:37]So if I if we zoom in a little bit this is the correction that we see here right now and the bounce from the February low. So again, this is the fear and greed act fear and greed index actually together with the Bitcoin price. And the important thing is to understand that this indicator on its own doesn't really tell you what the market is going to do next. It just tells you how people feel.

[00:09:00]But when you combine that with Elliot wave, it becomes a lot more powerful. I would never use this indicator on its own, right? Um but if you combine it with Elliot wave and we already have talked about the structure then you're not just looking at sentiment in isolation you're comparing sentiment to structure and from my current perspective I'm treating this market as part of a broader bearish phase and within that as you know the move we are seeing is very likely a Bwave bounce or corrective bounce and this is exactly where the fear and greed index becomes useful because a Bwave isn't just a technical pattern guys it's a psych ological phase. It's the phase where the market needs to rebuild confidence without actually changing the underlying structure. Now, if you if you look at how the fear and greed index behaves during these moves, um you'll notice something consistent after a decline. We had a decline obviously from the October highs. Yeah. Um the sentiment doesn't stay in fear for long or extreme fear.

[00:09:59]Down here, we had extreme fear. All right. It was really low. It was It just says I think it was around six. Yeah, the fe and greed index score. So it it starts to recover. It moves back toward neutral. I mean we were at record lows I think in in February. So it goes towards neutral and I mean we already moving up here. We already see some yellow points here. So we were maybe already in neutral uh or at least the higher fear range a few days ago, a couple of weeks ago. But um still though even you know it moves back towards neutral sometimes even slightly integrative in a B-wave bounce. So what you're seeing is that the way people feel about the market improves faster than what the market is actually doing structurally.

[00:10:51]And that's the key insight because in a real impulsive move especially in in something like a third wave up a real bull market. Yeah. Here this was obviously in the bull market you see a lot of green extreme greed even sometimes people tell me that you know when this is greed or extreme greed um we form a top. That's not true. Actually we want actually we want greed extreme greed because that tells us that the sentiment is there to drive the price higher. But at the moment we are not even getting to neutral really maybe slightly. We are not really getting into greed right now. And if we look at what happened in the last bare market, you see something very very similar. The last bare market we had the sell off from the November 21 highs into the January 22 lows. And I often say currently and what what we see right now from the February lows and what we saw in the last bare market from the January lows is very very similar. the market just recovered and I'm going to zoom in a little bit and maybe got to neutral maybe very slight greed but that was it maybe very slightly here above 50 55 that is greed mode here but you don't really get into the high greed areas you don't really get into the um extreme greed areas and so in a bitcoin bare market very very uh it's very common yeah to see these rallies maybe get into slight greed and especially in In the last bare market, it was very similar to what we see right now and very good to visualize. Yeah. And um very interesting that also in the last bare market into the April highs it was we you know we saw values of around 55 slight greed 60 maybe even but that was just barely enough to get people bullish and then some people got bullish already again often in resistance. So don't use this on it, you know, by itself, but combine this with Fibonacci and resistance and structure. And we see that we're now getting into resistance areas into targets. We're getting closer to our targets. We're not quite, you know, in the greed phase yet. Maybe even slight a little bit fearful. So that is also another indication that we probably should go a little bit higher to get people really a little bit more bullish.

[00:13:01]Yeah. But that's that's the key insight.

[00:13:03]Yeah. Because in a real impulsive move, in a real main trend, um in a third wave, structure and sentiment usually move together. Yeah. You get strong, clean price action and sentiments follow that strength. In a Bwave, it's different. Sentiment improves first.

[00:13:17]Yeah. But the structure remains rather weak. And that's what we see. I mean, with a lot of effort, we only now got to the 21week EMA. Um and you you you see overlapping price action. You see three-wave characteristics. You don't get that clean impulse. So if we go back to the um to the Bitcoin chart, very much overlapping price action, very messy, even the micro structures here.

[00:13:39]And with a lot of effort, we got to that 21 hold on 21week EMA, the white line here, which by the way got broken in 2022 as well here slightly, which I think could happen as well, just to make people a little bit greedy, right? Just to create enough bullishness to form a perfect trap.

[00:13:59]So what the fear and greed index helps you do is it helps you spot that mismatch. So it shows you when the market is starting to feel better even though structurally it hasn't really improved and that's what you would expect in a Bwave. Yeah because a Bwave needs that improvement in sentiment. It needs to start people start to believe that the correction is over because that's what allows the market to set up the next move down. And that next move down from an elite wave point of view is typically a C-wave. I already showed you where it might take us. Okay. And um yeah, that Cwave is usually the most aggressive lag. At least it can be because by that point the market has already pulled people back in during the Bwave. So what the market turn when the market turns then it tends to catch people off guard. By the way, a lot of the rally we see right now is not is not uh carried by spot. It's carried by derivatives. So it's weaker. If you're interested, we can talk a little bit about that in the in the next update as well. But um you know, if if we bring this into the current situation with a fear and greed index sitting somewhere in the high30s, what what it tells us is that we've clearly moved out of panic.

[00:15:10]Yep. We're no longer in extreme fear. Um and I wouldn't I wouldn't, for example, I wouldn't expect a Bwave to top in extreme fear. It it rather will likely form a low here in extreme fear and then bounce in a Bwave. That's also why the fear and greed index is so helpful because when sentiment starts to improve at some point a top becomes more likely not when we're in very oversold and extreme fear conditions. Um so we we don't see um the strong greed yet. We're in the middle zone where the market feels relatively stable again. It feels like that you know nothing special happens. People are starting to get a bit more comfortable. Maybe starting to take some more risk again and that kind of sentiment behavior. Yeah, it it fits very well with a corrective environment, guys, because if this was the start of a major new bull trend, you would typically expect a stronger and more persistent shift in sentiment and structurally we should see that as well.

[00:16:04]And one more thing, and it's an additional indicator that I'm I'm adding to our terminal, uh it's the search interest. Yeah. And so, if you just look at, you know, it's all about sentiment.

[00:16:14]So, I'm going to add more sentiment indicators here, but I plan to add the ones that are really valuable that I'm using myself. This is Bitcoin search interest on Google. And so you see the price here and then the search term Bitcoin. And this is search interest, guys. And it's just it's just bad. Uh it's just bad. It even it even broke this trend line here. Not sure how well you see that, but it broke the trend line. Not great. Maybe it's a fake out.

[00:16:44]Maybe we go a little higher, but it just shows us that this isn't really carried by much. Yeah, it's just not carried by much interest at the moment. Just isn't.

[00:16:55]So, um yeah, again that is that is what I wanted to show you. It it does it does confirm though what we see. Look, if if greed improves the market starts to feel a bit better, but the rally is carried by derivatives spot not. Yeah. And you don't see the wide search interest and yeah, price goes up a bit, but it's just not meaningful. Do you understand what I mean? From a structural point of view, nothing indicates it's the beginning of a new main trend. But of course, we'll stay close to it. Things can change as you know. And if we look at the short-term structure for Bitcoin, really no surprises here. Bitcoin is just moving sideways. That's exactly what we expected for the weekend. A wave four sideways correction or consolidation.

[00:17:37]And so, um, I defined for you guys the support zone between 77.1 and 78K yesterday. It is the support zone for a possible wave four. There are many ways how this wave four could play out. I think we'll just move rather sideways.

[00:17:51]And so I think what might happen is maybe a bit higher in the Bwave and then a C-wave down or even a triangle pattern is possible in this wave four before we go higher. Below 77.1K though I have to assume a top has already formed and then it is a three-wave top which could lead to another low. Okay. So at the moment um people ask me you know which which wave count is it? Well for what is important doesn't matter how I label it.

[00:18:14]What is important is do we get five waves up and that requires one more high from this support zone before we break below 77.1K.

[00:18:22]Please note the next resistance is around 79 1/2K strong resistance and ideally we would still see a rally to 82K at some point uh maybe even a bit higher to complete the pattern. So far all the pullbacks here have remained three-wave structures. Yeah, that's the update on Bitcoin. Hope you like the update. If you did, please hit the like button, leave a comment, and subscribe.

[00:18:46]And if you're interested in additional updates, I recommend that you check out our membership. The links are in the comment section. As I said, you will be able as a gold member to access the terminal with all the indicators I'm going to develop over the next few months. I mean, to be honest, I already have a lot of them, but they need to be thoroughly tested first. This is early access. Yeah, early access. So things might not be perfect and everything but for example the seasonality indicator is an absolute gem. It's it's amazing. Uh you can play around with it. You can change the assets. I mean you can even play around here with other assets like for example the Dow Jones, the DXY, Net Gas, Copper, Forex, all the thing you know important stocks, popular stocks here, even other cryptos uh that I cover like for example AVAX. So you get you get all the info here.