CDS Crypto News Fear in the Crypto Market: Fear & Greed Index Plummets as Bitcoin Sinks
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Fear in the Crypto Market: Fear & Greed Index Plummets as Bitcoin Sinks

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Fear in the Crypto Market Fear & Greed Index Plummets as Bitcoin Sinks

Fear in the Crypto Market: Fear & Greed Index at Lowest Level

Fear in the Crypto Market Fear & Greed Index at Lowest Level
Fear in the Crypto Market: Fear & Greed Index Plummets as Bitcoin Sinks 1

The popular Crypto Fear & Greed Index, developed by Alternative.me, a data source, displays the level of enthusiasm that the market has for Bitcoin and other major cryptocurrencies. The gauge’s lowest point since early January 2023, when bitcoin was selling at roughly $17,000 following 2022’s devastating bear market, was reached on Friday, when it fell to 29.

This past March, the metric notably sent a contrarian sell signal when it approached the 90 level, which was close to what turned out to be the 2024 peak of the overall cryptocurrency market and the all-time high of over $73,500 for Bitcoin. Since then, large altcoins have dropped by almost 50%, lesser tokens have lost even more, while BTC and ether have decreased by 25% to 30%.

  • Analysts cautioned that although the Crypto Fear & Greed Index is a well-liked contrarian indicator for buying and selling, there may still be more downside for bitcoin’s price.
  • According to Rachel Lin of SynFutures, seized Bitcoin sales by the US and German governments, along with sell pressure from Mt. Gox user reimbursements, have created a multibillion-dollar overhang.
  • According to Markus Thieled of 10x Research, a Fed interest rate cut in September would spark a recovery, but Bitcoin might drop as low as $50,000 in the coming historically bad months.

What Causes the Decline?

According to Rachel Lin, CEO and co-founder of derivatives trading venue SynFutures, “preemptively selling” as the estate of defunct Japanese exchange Mt. Gox started to refund investors this month, along with the unloading of seized bitcoin by German and US governments, were the main causes of the downturn.

She stated that it is doubtful that the selling pressure will lessen very soon. According to data from blockchain tracing tool Arkham Intelligence, the German government still possesses about $2.2 billion in Bitcoin, the US government has over $12 billion, and the Mt. Gox estate has over $8 billion in assets.

The direction of bitcoin in the coming days will be determined by the selling pressure from Mt. Gox users. The market expects most Mt. Gox users dump their tokens, but we might see a bounce back if the selling is lower than anticipated. On the other hand, if there is enough selling to push the price lower, we might be looking at the $50,000 level soon.

Lin

FAQ

What is the Fear and Greed Index?

The Fear and Greed Index is an indicator that measures market sentiment. Fear refers to an extreme bearish sentiment in the market, while greed refers to bullish expectations.

How Does the Fear and Greed Index Affect Bitcoin Prices?

High levels of fear can often cause prices to fall, while high levels of greed can signal price increases.

Why Does the Fear and Greed Index Fall?

The index usually falls due to market uncertainties, large waves of selling, or negative news.

For more up-to-date crypto news, you can follow Crypto Data Space.

Fear in the Crypto Market: Fear & Greed Index Plummets as Bitcoin Sinks
Written by
lectertodd

Lectertodd is 25 years old. She graduated from Çankaya University, Department of Psychology, in 2021. She actively works as a writer, translator, and editor for various websites. Moreover, she loves reading, researching, and learning new things.

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