Bitcoin’s (BTC) price saw a bullish turn of events on Sunday as the price broke out to $39,252, but many analysts are still on the fence when it comes to determining whether the digital asset is ready to continue its uptrend. 

To date, the crypto market remains on edge and is two months removed from Bitcoin’s all-time high near $65,000. A market analysis from Delphi Digital identified a “major head and shoulders pattern” that could “spell more short term pain if BTC dives below $30,000.”

With that in mind, now is a good time to review some key data points to gain a greater perspective on where Bitcoin’s price could go next.

Short-term holders suffer losses

A 50% decrease in price over the past two months may seem extreme to those unfamiliar with the volatility of the cryptocurrency market, but it comes as no surprise to the long-term hodlers who have seen multiple drawdowns of an even larger magnitude over the last decade. 

Bitcoin price drawdown from 52-week high. Source: Delphi Digital

As seen in the chart above, a drawdown of 70% or greater is not uncommon for BTC, especially following a significant run-up in price, hinting that the possibility for further pain is still a threat as bulls battle bears in the mid-$30,000 range.

The rapidly falling prices sent new and old Bitcoin holders running for the sidelines, resulting in traders selling at a loss according to Spent Output Profit Ratio (SOPR) data highlighted by cryptocurrency analyst Filbfilb. 

Bitcoin spent output profit ratio. Source: Decentrader

In the past couple of days, signs of a SOPR reset have appeared, indicating that average wallets are now selling at a profit again. 

The Crypto Fear & Greed Index (CFGI) has also reached its lowest level since the March 2020 sell-off initiated by the COVID-19 pandemic.

BTC drawdown vs. Crypto Fear & Greed Index. Source: Delphi Digital

The high levels of fear currently being experienced by a majority of traders have many sitting on the sidelines as concerns of further losses remain a legitimate possibility.

For the contrarian investors, however, low scores on the index are a signal to “be greedy when others are fearful,” as Warren Buffet would say, and the chart above shows that buying during high fear moments tends to be a good entry-level.

Related: Here’s how Bitcoin’s impending death cross could be a contrarian buy signal

Sentiment begins to rebound

While it’s true that Bitcoin has seen its price fall more than $30,000 over the past two months, it’s important to note that the amount it has fallen as well as its current price are nearly double the previous all-time high set in 2017, shining a light on just how significant the rally has been over the past six months.

On-chain analysis from Decentrader shows that an “oversold” signal was recently triggered, “suggesting that BTC may soon be ready to turn around and move to the upside.”

Bullish signal provided by the active addresses sentiment indicator. Source: Decentrader

The active addresses sentiment indicator compares the 28-day change in price, shown by the orange line, with the 28-day change in on-chain active addresses, which is represented by the band of grey lines.

The orange line moving from below the dotted green line back up into the active address change band is considered a bullish signal, and this most recently occurred on Thursday, indicating the possibility of a turnaround in the market.

According to Rekt Capital, a popular analyst on Twitter, Bitcoin is still on a path to realize a new all-time high.

For now, perhaps it’s best to just take a break from staring at charts and worrying about which way Bitcoin will choose. The long-term outlook remains strong as countries like El Salvador have begun choosing BTC as legal tender and more people become interested in cryptocurrency.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.