The Crypto Fear & Greed Index, a key measure of market sentiment for Bitcoin and the broader cryptocurrency sector, has plunged to its lowest level in 18 months. On June 24, the index dropped 21 points into the "Fear" zone, marking one of its steepest declines in recent history.
This sharp fall comes amidst growing fears of a potential $8.5 billion Bitcoin sell-off by Mt. Gox creditors and significant outflows from U.S. spot Bitcoin ETFs, totaling over $1 billion in the last ten days. Additionally, Germany's recent decision to liquidate some of its Bitcoin reserves has further exacerbated negative sentiment.
Despite the current fear, some analysts believe the market may be overreacting. Alex Thorn from Galaxy Digital emphasized that only a fraction of the anticipated Mt. Gox Bitcoin will likely hit the market, suggesting a more measured impact than feared.
Meanwhile, Bitcoin miners have been selling more Bitcoin than usual, contributing to the weakening market sentiment amid a declining network hashrate.
The Crypto Fear & Greed Index, which factors in market volatility, trading volume, Bitcoin dominance, and trends, last reached a similar low in January 2023, shortly after the collapse of FTX. The current situation presents a complex mix of factors driving market sentiment into fear territory.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
