Bitcoin’s Fear and Greed Index has nosedived into “extreme fear” territory for the first time since January 2023, reflecting growing market anxiety as BTC repeatedly fails to reclaim the $60,000 threshold.
Market Sentiment Hits New Low
The Crypto Fear and Greed Index, a metric that gauges market sentiment towards Bitcoin and other cryptocurrencies, dropped to its lowest level in 18 months. The latest plunge follows Bitcoin’s inability to surpass the $60,000 mark twice in just 48 hours.
Repeated Rejections at Key Price Level
On July 10, Bitcoin rallied to $59,485 but quickly dropped back to $57,000 within 12 hours. A similar scenario unfolded on July 11, with BTC briefly reaching $59,529 before falling again. As of now, Bitcoin is trading at $57,499, a 23% decline from its all-time high recorded on March 14 this year, according to TradingView data.
Crypto and forex trader Justin Bennett highlighted these rejections in a July 11 post on X, warning his 111,000 followers of a potential “rising wedge” formation, which could signal further price declines.
Factors Behind the Price Decline
Several factors have contributed to Bitcoin’s recent price struggles and the resulting market sentiment. A significant driver is the news that Mt. Gox has started repaying its creditors as of July 5, potentially releasing up to $8.5 billion worth of Bitcoin into the market.
Moreover, the German government’s substantial Bitcoin sales have added to the downward pressure. Over the past 24 hours, Germany transferred 16,254 BTC, valued at approximately $935 million, to market makers and exchanges, according to Arkham intelligence data.
Also Read: Germany’s Bitcoin Holdings Dwindle to 9,000 BTC
Understanding the Fear and Greed Index
The Crypto Fear and Greed Index evaluates market sentiment based on several factors:
- Market volatility (25%)
- Trading volume (25%)
- Bitcoin’s dominance (10%)
- Trends (10%)
Previously, market surveys accounted for 15% of the index, but this metric has been paused.
Historical Context and Recent Trends
The last time the index fell into “extreme fear” was on January 9, 2023. It has been on a downward trajectory since March 5, when it reached “extreme greed” with a score of 90, following Bitcoin’s climb above its previous all-time high of $69,000 set in November 2021.
