Markets
Bitcoin Fear and Greed Index Plummets to “Extreme” Fear: Recovery on the Way?
Bitcoin market sentiment has taken a sharp dip as the Crypto Fear & Greed Index has plummeted to “extreme fear” for the first time since January 2023. This decline in sentiment comes as Bitcoin struggles to reclaim the crucial $60,000 price level, failing twice in the past 48 hours.
Fear and Greed Index Hits New Lows
The Crypto Fear & Greed Index, which measures market sentiment towards Bitcoin and other cryptocurrencies, has fallen to 25, “extreme fear,” its lowest point since January 2023. This decline coincides with Bitcoin’s failure to breach the $60,000 threshold twice in 48 hours.
On July 11, Bitcoin surged to $59,000 but quickly fell back to $57,000 within 12 hours. The next day, it briefly reached $59,529 but again failed to hold, currently trading at $57,259.
Meanwhile, cryptocurrency and forex trader Justin Bennett tweeted that Bitcoin faced rejection at $60,000 once again. He also noted the potential formation of a “rising wedge pattern,” which could indicate further downside for Bitcoin in the coming days.
Factors Influencing Bitcoin’s Decline
The recent negative sentiment around Bitcoin This is partly due to news that Mt. Gox has begun paying its creditors, potentially releasing up to $8.5 billion worth of Bitcoin into the market. Additionally, large sales of Bitcoin by the German government have contributed to the downward pressure.
According to Arkham intelligence, the German government recently transferred 16,254 BTC (worth approximately $935 million) to market makers and exchanges.
Possible recovery in sight?
Despite the current market slump, there may be hope for recovery. However, with Germany government almost without Bitcoin holdings, the market may stabilize as selling pressure eases.
Furthermore, recent economic data could influence Bitcoin’s future price. The Consumer Price Index (CPI) for June showed a drop in US inflation to 3%, with core inflation at 3.3%.
This lower inflation rate may prompt the Federal Reserve to consider rate cuts, which could provide a Bitcoin price increase.