Can Bitcoin (BTC) Reclaim $90K Support as Crypto Fear and Greed Index Hits 34?

Bitcoin (BTC) has dropped by nearly 8% in the past 7 days as investors seem to be starting to panic as it once again loses the $90,000 support.

The Crypto Fear and Greed Index compiled by CoinMarketCap has dropped to 34 today, meaning that the market is in “early panic mode”.

Crypto Fear and Greed Index – Source: CoinMarketCap

We have been tracking the evolution of this key sentiment gauge lately, as it has served as a “canary in the coal mine” for trend reversals in the past.

In November this year, the Index hit a record low of 10, as the market adopted a risk-off attitude following the October 10 flash crash.

However, a similar low reading in April 2025 signaled a bottom after the December-March bearish cycle, meaning that this kind of “extreme panic” could be used as a contrarian indicator.

Recently, the F&G jumped to a 4-month high of 54, as BTC rallied to $96,000. However, President Donald Trump’s latest hostile rhetoric concerning Greenland has depressed sentiment once again.

Thus far, this contrarian signal has not delivered the same “contrarian” results compared to the April 2025 scenario.

Sell Signal Confirms Bear Flag in Bitcoin’s Daily Chart

Looking at the daily chart, we can see that Bitcoin has formed a bear flag pattern that could result in the continuation of the current downtrend.

BTC/USD Daily Chart (Binance) – Source: TradingView

Our signals system picked up a “decisional” candle on January 20 that confirmed a solid breakout of this pattern.

This system combines trading volumes, trend direction, and candle patterns to identify key movements. When buy or sell signals pop up as the price loses key levels, the probability of a positive outcome increases dramatically.

As we highlighted in a previous Bitcoin price prediction written a few days ago, our baseline scenario is that BTC will drop to $74,000 after this sell signal. For that move to be confirmed, the price must lose the $84,000 support.

That said, the Relative Strength Index is already supporting a bearish outlook as the oscillator dropped below the 14-day moving average, indicating a trend reversal.

As we head to the weekend, when trading volumes tend to dry up, sellers have the upper hand to push the price below $84K to squeeze out any remaining Bitcoin bulls.

Bullish Divergence Confirms Ongoing Consolidation Between $87K and $90K

Heading to the 4-hour chart, we got two consecutive “sell” signals since last Sunday that yielded positive results. The price seems to be consolidating between $87,000 and $90,000 as the RSI hit oversold in this lower time frame.

BTC/USD 4H Chart (Binance) – Source: TradingView

A breakout of this consolidation pattern will be useful in determining BTC’s next moves. If the top crypto loses the $87K support, that could set off a move toward $84,000 to retest that daily demand zone.

A bullish divergence in the RSI confirms that bearish momentum is slowing down. Hence, we may expect some sort of rebound. The $90,000 level is up for grabs for bulls, but, since the selling pressure has been quite strong at this level, a tug-of-war will likely unfold in the following hours.

The combination of this level’s psychological and technical importance increases the strength of any signals that pop up next. If we get another buy signal in this lower time frame, the road to $84,000 will be paved.

The opposite would be true if we get a “buy”, as that would mean that the price will jump back into the flag, possibly extending BTC’s consolidation for another few days.