Bitcoin price jumped back up to $84,500 on Friday

This shows why listening to what everyone else says about the market isn't always a good idea. Many traders panic and sell when prices go down.

Bitcoin (BTC) price bounced back up to $84,500 on Friday, showing why listening to what everyone else says about the market isn't always a good idea. Many traders panic and sell when prices go down. But history shows that markets often do the opposite of what most people expect.

Bitcoin Dropped to $78K – What Happened Next?

Earlier this week, BTC fell to $78,000, and many people online thought it would drop even lower. Social media was full of fear. This was just like what happened in February. Back then, people were also massively bearish and predicted that BTC would fall further. But instead, it bounced back up in early March.

According to Santiment, a market research firm, when fear is high, BTC usually manages to rise. And when too many people think Bitcoin will keep going up forever, it usually drops.

"When everyone is scared and selling their BTC, it means there are fewer people left to sell, which can cause the price to go back up. On the other hand, when too many people think BTC will hit new highs, they all rush to buy. But when there are no more buyers left, the price can fall suddenly."

This is why following the crowd can be risky, the crypto analytics platform noted.

Technical Signals That Support Bitcoin's Move

Some crypto experts also saw clues that BTC might go up. For example, Rekt Capital pointed out that the recent move from Bitcoin means that the price is increasingly filling the CME Gap, which is located between $82,245 and $87,000.

This is interesting because, in previous bull markets, the price used to completely clear out the CME Gaps, the crypto analyst stated.

Moreover, Bitcoins 50-day moving average crossed above the 200-day moving average, forming a golden cross.

This has happened before big Bitcoin rallies. For instance, in 2016, the price went up by 139% after the golden cross, in 2017, it rose by 2,200%, and in 2020, it went up by 1,190%.

This means BTC could go even higher if history repeats itself.

What's Next for Bitcoin?

Right now, BTC is trading at $84,145, still down 22.7% from its all-time high of $108,786. However, the market looks stronger than before. The recent price movement could mean Bitcoin is ready to go higher.

Despite the recent recovery, traders should be cautious. When too many people expect Bitcoin to rise quickly, there’s always a chance for another drop.

Instead of following the crowd, smart traders watch for key signs and make their own decisions. This includes considering technical indicators, analyzing market trends, and evaluating fundamental factors that could influence the cryptocurrency's value.