- Bitcoin’s Fear and Greed Index hits an 18-month low, plummeting to 30, signaling market apprehension.
- A significant 21-point drop on June 24 marked one of the largest day-to-day decreases in Bitcoin’s recent price.
- Outflows from US ETFs, Mt. Gox’s potential sell-off, and miner activity are fueling the negative sentiment.
Bitcoin’s Fear and Greed Index has plummeted to 30, the lowest in 18 months. Fear and Greed Index typically measures market sentiment. On June 24, the index fell by a significant 21 points, entering the dreaded zone.
This sharp decline marks one of the most substantial day-to-day drops in the price of Bitcoin in recent years. A week ago, the same index was comfortably sitting at 74 in the Greed zone, reflecting a more optimistic outlook. However, the recent shift to Fear signals growing apprehension among investors.
— CryptoRank.io (@CryptoRank_io) June 25, 2024
Fear & Greed Index Hits 30 (Fear)
The #Bitcoin Fear & Greed Index just entered the fear zone, dropping to 30! This is the lowest index value since September 12th, while previously the FGI was below 30 in January 2023. pic.twitter.com/BxeveE1VH2
Fear & Greed Index Hits 30 (Fear)What Factors are Driving the Sudden Change in Market Sentiment?
Firstly, there have been substantial outflows from spot Bitcoin exchange-traded funds (ETFs) in the United States. Over the last ten trading days, these outflows have totaled more than $1 billion.
Additionally, there are concerns that Mt. Gox, the infamous crypto exchange that collapsed years ago, might be preparing to sell a staggering $8.5 billion worth of Bitcoin to its creditors. Such a massive sell-off could significantly impact the market sentiment.
Moreover, Germany has also started selling some of its Bitcoin reserves, adding to the negative sentiment. These combined factors have led to a cascade of investor anxiety, pushing the Crypto Fear and Greed Index into the ‘Fear’ territory.
Bitcoin miners have also played a role in weakening market sentiment. They’ve been selling off more Bitcoin than usual, coinciding with a decline in the network hashrate. This double outflows from ETFs and miner activity has contributed to the prevailing fear among investors.
The Crypto Fear & Greed Index considers several factors to arrive at its score, including market volatility, trading volume, Bitcoin dominance, and trends. While it used to factor in surveys, that metric is currently paused.
Over the last 12 months, the index has mostly trended downward, with the extreme greed of March 2024 (when Bitcoin surpassed its previous all-time high price) now a distant memory to traders losing hope.
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