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Crypto Market Drops To Extreme Fear As Bitcoin Struggles To Hold $19,000
The crypto market sentiment has been on the decline over the last year and it has come in tandem with the decline in bitcoin price. Bitcoin, which moves the entirety of the crypto market most times, has had a tough go of it in recent times. Now, as the pioneer cryptocurrency continues to struggle to hold a good value in the market, sentiment has plunged towards 3-month lows.
Market In Extreme Fear
The crypto market is now entering what is one of the longest fear trends in recent history. Over the last six months, there has not been any significant recovery in market sentiment. The last time that the crypto market had come close to completely exiting the fear territory was back in August when there was some recovery in the market.
During this time, the price of bitcoin had seen a run-up that put it above $25,000. However, it had stopped just short of entering the green territory and has remained down since then.
For three months now, market sentiment has remained muted and has not seen any positive movement. The score for last week came out to 22 which put the market firmly in the extreme fear territory, also following the same theme for the month of September.
Market sentiment in extreme fear | Source: alternative.com
It was expected that the market would see some recovery in the month of October but there hasn’t been much green in the market since then. The present score for the market sentiment is 20, which shows even more decline in investor sentiment.
Bitcoin Carries The Market
Bitcoin has dominated the crypto market since its inception, even though the dominance is now lower than what it used to be. Nevertheless, the bitcoin price movement still determines the market direction most of the time and sets the tone for investor sentiment. Given this, for the crypto market to finally leave the fear territory, there would need to be a surge in the price of bitcoin.
However, one thing that comes with negative investor sentiment is the refusal to put money into the market. People are more likely to invest when prices are going up instead of down even though the latter is a better time to get into the market.
BTC fails to reclaim $20,000 | Source: BTCUSD on TradingView.com
Bitcoin’s current price does not spark confidence in the hearts of investors, hence the reluctance for investors to want to purchase cryptocurrencies. To do so, the price of the digital asset would have to cross $20,000 once more, which is currently not in the cards given that the cryptocurrency is trading below its 50-day moving average.
Bears are already mounting significant resistance at $19,600, and given the constant sell pressure on BTC, it is likely that the price of bitcoin will revisit $19,000 before testing the resistance at $19,600. But a successful test of this resistance level will see BTC aiming for the next significant resistance at $20,200.
Featured image from Genetic Engineering and Biotechnology News, chart from TradingView.com
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Market Sentiment Holds Steady As Bitcoin Aims For $24,000
Bitcoin has been holding steady over the weekend. The cryptocurrency had been able to beat the $24,000 mark last week but had retraced downward not long after. However, this retracement has not had too much of a negative impact on the sentiment toward the digital asset. As bitcoin has started upwards once more, the market sentiment has been incredibly strong.
Bitcoin Goes For $24,000
The opening of the new week saw bitcoin start below $24,000 in the early hours of Monday. This quickly changed with a rally on a 6-hour basis that saw bitcoin add more than $500 to its value. This helped it reclaim this coveted point once more, putting it firmly above its 50-day moving average.
Now, the 50-day MA has always been an important technical level for bitcoin. It was one indication of the crash that rocked the market two months ago and the bear market trend that ensured. Since the digital asset has now beat this point, it has now converted the bearish indicators to bullish ones. It has also resulted in a reversal of the selling pressure in the market. Now, as buy pressure mounts, the value of bitcoin is expected to grow.
The recent recovery has now adequately moved the support level for bitcoin. The recent move shows that there is now significant support for BTC at $23,500, which served as a bounce-off point. Resistance for bitcoin now sits at $24,500, a level that bitcoin has been unable to beat since the crash.
BTC price exceeds $24,000 | Source: BTCUSD on TradingView.com
Sentiment Remains Positive
Crypto market sentiment has not been the best in recent months, but there have been some remarkable recovery over this time. When the market crash happened back in June, sentiment had plunged far into the extreme fear territory, keeping investors from actually making any meaningful moves in the market.
However, with the turn in the price of bitcoin, the market sentiment has begun to change. It had grown into the fear territory and is currently sitting at a score of 30 on the Fear & Greed Index. This shows steady sentiment in the market, which is starting to skew more into the positive.
With this return of faith in the market has come more investments. Exchange outflows for last week show that investors are starting to accumulate the coin, especially among smaller investors, with the number of addresses holding at least 1 BTC reaching a new all-time high of 892,803 on Monday.
The market sentiment still has a long way to go to move completely out of the fear territory. However, if bitcoin is able to make its mark and break through $25,000, sentiment is expected to turn bullish very quickly.
Featured image from Coindesk, chart from TradingView.com
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Crypto Market Shaves Off $50 Billion In One Day As Reversal Begins
The crypto market has now seen more than $50 billion lost in a one-day period as the market lost its recovery streak. This had been expected for the market due to the large recoveries recorded in a short period of time. This has brought down the crypto total market to an important level.
Crypto Market Drops Below $1 Trillion
Bitcoin and Ethereum’s remarkable recoveries last week had done enough to push the whole of the market upward. As a result, the crypt market quickly added more than $100 billion during this time. It had pushed the total market cap above $1 trillion once more, too much jubilation among crypto investors.
Related Reading | Ethereum Weekly Exchange Net Flow Points To Growing Accumulation Trend
However, this recovery would prove to only be short-lived given that the crashes had been as swift. In the span of one day, the crypto market had lost more than $50 billion following the dips and has now lost its hold on the $1 trillion market cap.
Presently, the total crypto market cap is sitting at $944 billion, more than a $100 billion loss from where it was sitting last week. The loss pattern over the last few days is now seeing cryptocurrencies in the space testing an important support level and mostly failing to hold.
Bitcoin has since lost its footing at $22,000 and is now trading at low $21,000s, while Ethereum has declined to the $1,400 territory. This has dragged down their market caps to $402 billion and $171 billion, respectively.
Market Sentiment Takes A Dive
As the crypto market had recovered, the market sentiment quickly climbed. For the first time in two months, investor sentiment had successfully made it out of the extreme fear territory to be sitting in fear. With the continuation of the recovery, the sentiment score had increased to close at a new two-month high of 30 last week.
Related Reading | More Than 57,000 Traders Liquidated As Bitcoin Declines Below $22,000
The sentiment had consistently been up for the last couple of days until Monday, when the prices had begun to fall. The dip in sentiment saw the Fear & Greed Index return a score of 26 for the last day, signifying that investors are once again becoming wary of the market.
While the bearish trend is not completely established yet, it is gradually becoming the norm over this time. Following historical trends, there will be recoveries and pullbacks, which will see the market establish lower highs and lower lows.
Featured image from CNBC, chart from TradingView.com
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Funding Rates Return To Neutral Following Bitcoin Relief Rally
Bitcoin funding rates had seen a very negative month between mid-June and mid-July. The funding rates, which had previously remained muted, quickly declined below neutral and proceeded to spend the next one month on this level. However, there is a significant change as last week saw funding rates return to neutral.
Funding Rate Recovers On Exchanges
The bitcoin funding rates had been touching low points as the price of the digital asset struggled. This was concerning given that funding rates were expected to improve as the digital asset began to basically trade at what was described as a “discount.” This would not be farther from the truth, as funding rates fell to their lowest points this June. It indicated that perp traders were still bearish on the cryptocurrency and refrained from moving in.
Related Reading | Bitcoin Dominance Dives As Ethereum Takes Up More Space
Last week would come with good news as funding rates returned to neutral and stayed there. Binance and Bybit crypto exchanges both recorded funding rate levels of 0.01%. The return to neutral came as the price of bitcoin started a relief rally that saw it break above $23,000.
Funding rates return to neutral | Source: Arcane Research
Open interest had also followed the same route, although it retraced during the week when the price fell once more. It showed that there is still a lot of leveraging going on in the market since the bitcoin open interest was not much different from what was recorded the prior week, even with the decline.
Bitcoin Traders Turning Bullish
The recovery of bitcoin funding rates to a neutral level is a testament to the returning positive sentiment among traders and investors. It definitely does not signal that the market has returned to its previously bullish phase, but it is an indication that investors are now looking favorably at the bitcoin and crypto market at large.
BTC retraces downwards | Source: BTCUSD on TradingView.com
It tracks along with the Fear & Greed index which has now moved out of the ‘Extreme Fear’ territory for the first time in almost three months. It saw an incredible bounce from last week’s sentiment, with a score of 18 putting it in extreme fear. Although the market is still fearful, the recovery is seeing faith return to the market. It is also evidenced in the buying pressure that has been building this week.
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The correlation of the funding rates with the price of bitcoin can either be good or bad from here on out, depending on how well the cryptocurrency performs in the market. If it continues its recovery trend, then funding rates may return above neutral for the first time in more than two months.
Featured image from CNBC, charts from Arcane Research and TradingView.com
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Market Wallows In Extreme Fear As Bitcoin Struggles To Hold $20,000
Bitcoin has been struggling in recent times and even with the recovery, continues to find it hard to hold above the $20,000 level. With the crash has also come a significant decline in investor sentiment which has reached some of its lowest points in recent years. And even with bitcoin finally making the coveted recovery above $20,000, it seems investor sentiment is finding it hard to keep up as it remains firmly in the negative.
Market In Extreme Fear
According to the Crypto Fear & Greed Index, a tool that measures how investors are feeling towards the market, investors are still very wary of the market. The index is currently at a score of 11 which means that the market is still in the extreme fear territory.
Related Reading | By The Numbers: The Worst Bitcoin Bear Markets Ever
This comes as no surprise given where the price of the leading digital assets in the space has been. Even profitability has plummeted in this time period, leaving a lot of investors holding bags of losses in the market. Additionally, multiple events have also played integral roles in getting investor sentiment to this point.
Investor sentiment in extreme fear | Source: alternative.me
The first had been the LUNA crash that had wiped billions of dollars off the market. Then leading lending protocol had frozen withdrawals and transfers, essentially blocking off thousands of investors from being able to access their funds.
With crypto being locked on multiple platforms, investors are wary of putting any money in the market for fear of losing it or having it locked on a platform. Hence, inflows into the space have slowed significantly in wait for better sentiment.
Where Is Bitcoin Headed?
Bitcoin had fallen as low as $17,600 in its last week’s downtrend. This was below the previous cycle peak, triggering fear among investors that there may be no support. However, the digital asset had found support and had since recovered back above $20,000 where it is now resting.
Nevertheless, the digital asset continues to struggle. Holding above this level has been a herculean task, especially with the significant resistance being mounted by bears at the $21,000 point. Moreover, some in the space expect the price of the digital asset to keep declining from this month.
BTC recovers above $20,000 | Source: BTCUSD on TradingView.com
Going along with the halving trend that bitcoin has followed since its inception, it may be at least another year before the digital asset makes a recovery towards its previous all-time high. Looking at historical data shows that the next bull market may likely start in May 2024, when the next halving occurs.
Related Reading | Bitcoin Perpetual Open Interest Suggests Short Squeeze Led To Crash
Bitcoin is now trading above its 5-day moving average for the first time since the crash. However, this does not essentially mean a bull trend is underway. Rather, it shows that a certain level of stability is beginning to return to the market.
Featured image from Guardian.ng, chart from TradingView.com
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Bitcoin Miners’ Exchange Flow Rises To Seven-Month High Amid Bloodbath
Bitcoin mining profitability has plummeted by more than 75% from the market peak, and is now at its lowest level since October 2020.
Bitcoin Price Plummets Further
Bitcoin’s price plummeted to a 52-week low of $20,800 on Wednesday, down from an all-time high of $68,788 by more than 70%. Despite the fact that the price has already returned above $21,000, important market indications indicate that bears still have a strong grip on the current market.
The Bitcoin Miners to Exchange Flow, a metric that measures the amount of BTC transferred from miners to crypto exchanges, hit a seven-month high of 9,476. The increase in exchange flows suggests that miners are selling their BTC in anticipation of a price drop.
BTC miners’exchange flow. Source: Glassnode.
Related article | Exchange Inflows Ramp Up As Crypto Investors Clamor To Exit Market
Miners Actions Signals Market Sentiment
BTC miners’ activities often mirror broader market sentiment, as they typically sell BTC to avoid losing money on their mining payouts. The large drop in mining profitability explains the increase in Bitcoin miners selling activity.
Mining profitability has plummeted by more than 75% since its peak, and Bitcoin’s hash price is at $0.0950/TH/day, the lowest since October 2020.
BTC/USD falls to a 52-week low. Source: TradingView
The netflow of miners to exchanges has also improved. When the miner netflow is positive, it means that more coins are being transmitted to exchanges than to individual wallets. This type of activity indicates that miners are negative on the price and are feeling pressured to sell.
With the price of BTC falling below $21,000, many BTC mining rigs have become unprofitable and may be shut down if the price does not recover. As the whole market value went below $1 trillion, the rest of the crypto market followed BTC’s price behavior.
BTC has gone through a number of bull cycles in the last decade, each followed by an 80%-90% drop from its peak. The BTC price, on the other hand, has never gone below the previous cycle’s all-time high. BTC is currently trading at its 2017 high of $19,783, and any sell-off from here might drive it back into 2017 territory.
Related article | TA: Bitcoin Shows Signs of Recovery, $23K Presents Resistance
Featured image from Getty Images, chart from TradingView.com
Negative Sentiment Deepens In Crypto, Why Recovery May Not Last
Negative sentiment in the crypto market has been ramping up in the last few months. This comes hot on the heels of a market crash that saw top coins such as Bitcoin and Ethereum drop to one-year lows. It has resulted in some of the lowest scale readings that the Fear & Greed Index has put out in recent times and it looks like this is only just beginning as negative sentiment has now touched yearly lows.
Crypto Market In Extreme Fear
Just like with any declining market, investor sentiment has turned to the worse. Indicators show that the market is now in extreme fear, meaning that investors are wary of playing in the space. This has been the case for a while but the recent readings provided by the Crypto Fear & Greed Index show that it is worse than expected.
The index currently displays a score of 10 which is one of the lowest levels that it has been in the last six months. The last time the index was this low was in January when the market was still reeling from the December 4th crash. What followed was a prolonged period of downtrends, similar to what is being experienced in the market for the last few weeks.
Related Reading | Perp Traders Remain Quiet As Bitcoin Struggles To Hold $30,000
This negative sentiment continues to wax stronger even through recoveries. Currently, the price of bitcoin is back above $30,000 and Ethereum continues to push for $2,000 but that has not triggered any change in investor sentiment. Indicating that sentiment is not following the market movement as strongly as it used to and is rather hanging on to where investors believe the market is headed.
Total crypto market trending $1.25 trillion | Source: Crypto Total Market Cap on TradingView.com
Recovery Not Strong Enough?
The recovery that is being recorded in the early hours of Monday is a welcome one. However, it is debatable if this recovery will last. This is because the bears have since had a stronger hold on the market compared to the bulls, making the market prone to a sudden pull-down.
Looking at indicators for Bitcoin, which is a market mover, it continues to trade below the 50-day moving average despite the recovery. It remains a seller’s market with indicators like this especially given where the next support level lies for the digital asset.
Related Reading | Ethereum Profitability Dumps To 2-Year Low As Price Corrects Below $2,000
For BTC, adequate support is present only at the $28,108 level. This means that any decline now will see the digital asset crash through its Sunday gains and fall back to pre-weekend levels. It also doesn’t help that indicators are pointing to sell on all angles.
To maintain the current recovery trend, there will need to be a large influx of funds into the market. Even at oversold levels, various cryptocurrencies remain prone to further declines, unless buyers can ramp up their activity enough to stall a downtrend.
Featured image from Phemex, chart from TradingView.com
Disclaimer: The following op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.
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Crypto Liquidations Reach $1 Billion As Sentiment Falls To 10-Month Lows
The crypto market has been subject to large liquidation following the price crash. Coming out of the weekend, the market had recorded one of its worst crashes which saw bitcoin fall below the $30,000 territory for the first time this year. With this had come hundreds of millions in short liquidations. However, the bloodbath seems far from over as the market continues to crumble and liquidations have now run over the $1 billion mark.
Crypto Traders Getting Rekt
After the crash that rocked the market coming out of the weekend, crypto traders had taken a hard hit. However, like always, this is always skewed to one demographic, and long traders had taken the hit with 77.5% of longs making up the majority of the $421 million liquidation figure that had been recorded on Monday.
Related Reading | Bitcoin Price Hits Three-Month Low, What’s Driving This?
With Tuesday now on the horizon has come even more challenges for traders in the space. While most speculated that bitcoin would not fall to $30,000, it had done just that and even fell briefly to the $29,000 territory before recovering once more. The damage would be done though as more traders would see their positions liquidated in the market.
This number has now gone above $1 billion liquidated in the past 24 hours with Bitcoin and Ethereum traders bearing the brunt of it. Once again, long positions continue to dominate the liquidations as bitcoin struggles to find its footing and recover. The numbers are slightly better in favor of long traders falling from 77.5% on Monday to 71.8% on Tuesday.
Crypto liquidations surpass $1 billion | Source: Coinglass
The total amount of liquidations sits at $1.10 billion at the time of this writing. Longs account for $789.27 million and shorts came out to a total of $310.04 million. Bitcoin and Ethereum continue to rival one another with $354.77 million and $326.51 million in liquidations respectively.
Market Sentiment Dives To Hell
Along with the crypto market crash has been the dip in market sentiment. This really is no surprise as sentiment has been moving consistently into the negative for the past couple of weeks. However, the market crash has accelerated this movement.
The Crypto Fear & Greed Index now has a reading of 10. This is one of the lowest that the index has ever been in the past year. With the number so low, it puts the market in the extreme fear territory. This means that investors are warier than ever to put money into the market, with some opting to liquidate their holdings in order to avoid more losses.
Related Reading | Ethereum Miners Surpass Bitcoin Miner Revenue By $224M
One thing to note though is that low sentiment can also be a prelude to a bull rally. The last time the index was this low was in July 2021. What followed was a recovery that eventually served as the lift-off point for bitcoin hitting its all-time high of $69,000. If history repeats itself, then this may very well be another start to a massive bull rally. That is if the bottom of the current crash has been achieved.
Crypto market loses over $1 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from ITPro Today, chart from TradingView.com
Crypto Market Crumbles To Extreme Fear, Is It Time To Buy?
Crypto is still holding up to all of the onslaughts. It, like other financial markets, has been subject to a lot of stress following the political tensions that continue to rage on. However, investors have found solace in the digital assets that have continued to hold up. Although returns have not been great, there has not been too high a slip in prices. But it hasn’t helped market sentiment much.
The crypto market is propelled a lot by investor sentiment. Depending on where sentiment skews, it can be an indicator of where the market is headed. Currently, market sentiment is very much in the negative territory as evidenced by the Fear & Greed Index.
Market Falls To Extreme Fear
The Fear & Greed Index is an index that measures market sentiment across a number of factors. Using this, it puts out a number on a scale that shows how investors are feeling about the market. This week has not been a good one for the crypto market in terms of sentiment as it has fallen deep into the fear territory. After spending the majority of last week in the neutral territory, the Fear & Greed Index has not pointed its finger at Extreme Fear.
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The fall into this territory comes as a result of declining prices. Coming out of the weekend, bitcoin which had managed to recover to the $40K-$44K level last week had begun to slip up. By the time the new week rolled around, the digital asset had once again fallen back below $40,000, taking the rest of the market with it. Sentiment quickly turned negative, putting the index in the extreme fear territory.
Market goes into extreme fear | Source: Alternative.me
It seems the month of March will follow in the footsteps of February which had closed out the month in Fear. Currently, the crypto market is at a score of 21 on the Fear & Greed Index. This may not be the lowest that the index has gotten in recent times, but it is still a low number nonetheless.
Time To Fill Up On Crypto?
Trying to time the market can often be a futile endeavor given how highly volatile cryptocurrencies can be. But that does not mean that investors cannot look to indicators to try to pinpoint the best time to enter the market. One of those indicators that investors often use to determine if they should enter the market is the Fear & Greed Index.
Related Reading | Crypto Markets Slightly Recover After Weekend Decline
There is a saying in the investing world, “buy when there is blood on the streets”. This suggests that investors should buy assets when the market is down. One indicator that can point to a good buying time is when others are fearful and wary of getting into the market. It is the belief that this is a time when people begin loading up their bags and as such, the value of assets will begin to go up.
Crypto total market cap below $1.7 trillion | Source: Crypto Total Market Cap on TradingView.com
However, this cannot always go as planned as sometimes even purchasing digital assets when the market is down does not guarantee that there is a reversal coming up. The crypto market is unpredictable with a mind of its own and sometimes when investors believe the prices cannot go further down, they do. So the best time to buy is subjective and based on the experience of each investor.
Featured image from TED, chart from TradingView.com
Ethereum Sports Bearish Signals As Crypto Market Shifts Back Into Fear
Ethereum has mostly mirrored bitcoin’s run in the recent rally. This has seen the digital asset break as high as $3,000 once again for the year. This point which has proved elusive for the cryptocurrency has continued to give it a hard time. In previous times, Ethereum has had a had time staying above this level. Such has been the case this time around as it fails to secure its spot above e$3K.
Ethereum On The Decline
Like all other cryptocurrencies, Ethereum is a highly volatile asset and as such is subject to wild fluctuations in its price. For the last few months, it has fluctuated but remained mostly around the $2,600 to $ 2,800=0 level. With the recent rally, it was finally able to break out of this trend and begin a whole new one, one which saw it rise above the coveted $3K level.
Related Reading | TA: Ethereum Prints Bearish Pattern, Why It Could Correct To $2.8K
Nevertheless, this recovery would prove to be short-lived given that ETH could not maintain this position. Meeting fierce resistance from the bears at the $3,000 point, the digital asset was unable to form any meaningful support above it. This meant that the price crumbled below it but it would prove to be a continuous downward trend given the current indicators.
The fall below $3k saw the digital asset trading below its 50-day moving average. Now, this is an incredibly important point for cryptocurrencies in general given their high volatility. Since buyers are unwilling to purchase the digital asset at prices they did over the past few weeks, it indicates that Ethereum is still a seller’s market. Thus, it is expected that there will be a continuous downtrend as more coins are dumped on the market.
ETH falls below $3k | Source: ETHUSD on TradingView.com
This however does not spell bad news all around though. A market like ETH’s can quickly switch up and turn into a buyer’s market, especially when prices are as low as they are right now. If this happens, then Ethereum could very well see another 10% bounce that will cement its position above the $3k resistance point.
Market Sentiments Falls To Fear
The Fear & Greed Index had moved out of the fear territory back into a neutral point at the start of the week but this new wave of positive sentiment did not hold. The index has now moved back into fear at a current score of 39 as at the time of this writing, showing that despite recent rallies, investor sentiments are still more negative than anything.
Related Reading | Terra (LUNA) Outperforms Popular Cryptos Ether, Dogecoin In The Past 24 Hours
Ethereum and the crypto market are directly affected by investor sentiment as they show when investors are likely to put money in the market. Currently, with the index in fear, it shows that investors are very wary of putting money in the market. However, this does not necessarily spell bad news for ETH.
Market sentiments drop to fear | Source: Alternative.me
Usually, when most investors are fearful, it can present a good buying opportunity. In the past, whales have been known to take advantage of moments like these to fill their bags. If so, then ETH can kickstart another rally. But only a large absorption of current supply can start the digital asset on this path.
Featured image from CNBC, chart from TradingView.com
Bitcoin Sentiment Reaches Local High, But Can’t Shake Recent Fear
Last week, Bitcoin sentiment shifted to greed for the first time in four months, but has since fallen back down into fear territory amid the current geopolitical and macro uncertainties.
Bitcoin Fear And Greed Index Slips Down From Four Month High
As per the latest weekly report from Arcane Research, the crypto market sentiment has once again sunk down to fear after briefly entering greed last week.
The “fear and greed index” is an indicator that tells us about the general investor sentiment in the Bitcoin and wider crypto market.
The metric uses a numeric scale that goes from zero to hundred for representing this sentiment. All values above the “fifty” mark mean that investors are currently greedy.
On the other hand, values below this cutoff imply that the market is fearful at the moment. Extreme values of above 75 and below 25 belong to the “extreme greed” and “extreme fear” territories, respectively.
Some investors think that buying while the market is extremely fearful is the best as bottoms often tend to happen during such periods.
Related Reading | Bitcoin Breaks Above $44K, Can Bulls Push Price To Next Level?
Similarly, selling during extreme greed may be a viable strategy due to historical top formations in such periods. This philosophy is often called “contrarian investing.” This quote from Warren Buffet sums it up the best:
Be fearful when others are greedy, and greedy when others are fearful.
Now, here is a chart that shows the trend in the Bitcoin fear and greed index over the past year:
Looks like the value of the indicator is at 46 right now | Source: The Arcane Research Weekly Update – Week 6
As you can see in the above graph, over a week ago, the metric observed some sharp uptrend as it crossed the 50 mark for the first time in four months.
However, since then, the value of the index has declined, and now the Bitcoin market sentiment is once again that of fear.
Related Reading | Bitcoin Mining Stocks Lose 50-60% Value Since Crypto Price Peak
The report suggests that this trend may be because of broader financial markets derisking in response to current geopolitical and macro uncertainties.
Also, according to some other data, the Bitcoin leverage ratio has sharply dropped over the past week, further suggesting that investors are reassessing their risk.
BTC Price
At the time of writing, Bitcoin’s price floats around $44.2k, up 1% in the last seven days. Over the past month, the crypto has gained 3% in value.
The below chart shows the trend in the price of BTC over the last five days.
BTC’s price has surged up over the past couple of days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research
Market Sentiment Crumbles As Sell-Offs Drags Bitcoin To $33,000
The current market crash is no doubt one of the hardest to hit in recent times. Bitcoin as well as other digital assets have suffered massive dips as a result of the crash. For Bitcoin, the pioneer cryptocurrency has had more than 50% of its all-time high shaved off in the last two months. This has caused it to hit new six-month lows as its price crashes to $33,000 for the first time since the summer.
Market sentiment has since nosedived in accordance with the movement of the market. As investors become increasingly wary of the market, more so than it was during the crash in May, sentiment has skewed entirely into the negative. The Fear & Greed Index puts this into perspective with its current rating as it now sits at one-year lows, crashing to 11 on the scale.
Related Reading | Ethereum Fee Averages Remain Above $30 Despite 35% Drop. Price Pump Incoming?
Fear & Greed Index Goes Haywire
The Fear & Greed Index has been consistently declining into the negative as bitcoin and others have continued to record massive fluctuations. Now, though, the index has gone completely berserk as it crashes into one of the lowest recorded points. On Sunday, the Fear & Greed Index hit a score of 11, completely registering sentiment in the negative as it dived into extreme fear.
The following day has not come with much good news as the Fear & Greed Index still shows that investors are very wary of the market. The index currently sits at 13 at the time of this writing, a mere 2 points higher than its weekend low of 11. Nevertheless, the Fear & Greed Index has now spent a week in extreme fear as last week concluded with the index in the same territory.
Fear & Greed Index remains in extreme fear | Source: alternative.me
Sell-offs remain the order of the day with investors scrambling to save themselves from more losses. It looks to be what is the start of another stretched-out bear market, as the last time something like this occurred was in 2018. After this, the market did not recover for another two years. If history is anything to go by, then the downtrend may not be over, with some predicting the bottom to be as low as $10,000.
Bitcoin Liquidations Rack Up
Amidst the sell-offs and price crash has been massive liquidations. Bitcoin long traders have naturally borne the brunt of the recorded liquidations with hundreds of millions of dollars in longs liquidated in the space of 24 hours. BTC liquidations racked up to $390 million in a single day, while the 12-day chart looks even worse with more liquidations taking place.
Related Reading | Bitcoin Breaks $37,000, Why Downtrend To $29,000 Is Likely
In total, there have been over $283 million in bitcoin liquidated in the last 12 hours. Longs have made up 80.8% of all liquidations according to data from Coinglass. OKEx, Binance, and FTX maintain the lead for exchanges with most liquidations as the majority have occurred on these platforms.
BTC recovers to $34k | Source: BTCUSD on TradingView.com
Bitcoin’s price continues to trend low, touching $33,000 in the early hours of Monday. Twitter is abuzz with talk of the bitcoin crash with #BitcoinCrash trending. The digital asset is now trading at $34,200, with indicators pointing towards further dips.
Featured image from Unfinished Success, charts from alternative.me and TradingView.com
The Year In Review: An Emotional Rollercoaster For Crypto Investors
The crypto market this year saw some ups and downs that had market sentiment fluctuating widely. Investors had experienced a year like no other given the multiple bulls runs and subsequent crashes and dips that then plagued the market. For some, it was the best year after their portfolios lay in the red for the past three years, while for others, especially those who got in at the height of the bull rallies, it has been a brutal year.
Nonetheless, it has been a year packed with lessons for all investors. Moving from incredibly bullish to bearish has helped educate investors that it cannot always be dark, neither can it always be bright. In this report, we take a look at the sentiment movements in the year and how emotions have moved with the market.
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Crypto Fear & Greed Index Fluctuates
Entering into the year had investor sentiment at one of its highest. Right in the extreme greed territory, the increasingly positive outlook of investors would play out over the next couple of months in the market. For four months, market sentiment was in extreme greed, and faith in cryptocurrencies remained high. However, this would change not too long after.
The very first notable price crash in the crypto market had happened in May, which saw market sentiment plummet with it. After staying in the greed territory for so long, the sentiment was suddenly in fear and investors were wary of the market. This continued through most of the summer as market-wide dips continued to rock the market, in turn dragging sentiment more into the negative.
By spring, however, the market had once again begun to rally. Sentiment, slowly but surely, moved out of the fear territory and went into neutral, hovering between this and greed.
Fear & Greed Index fluctuates widely in 2021 | Source: Arcane Research
August would market the beginning of another stretch of positive sentiment as the market once again dived into greed territory. This was followed by rallying prices, with investor favorites hitting new all-time highs.
This would prove to not last long as sentiment once again derailed back into the negative following the September 7th market crash. The Fear & Greed Index would again trend low until another rally towards the end of September brought it back up again. This time around, the market sentiment would spend a considerable amount of time in the greed territory before reversing again.
Related Reading | Bullish Signal? Ethereum Market Dominance Sitting Above 20%
Investors who are mostly seasoned have used tools like the Fear & Greed Index to profit off the crypto market this year. So while others have been scared of putting money in the market, these investors have doubled down on their investments and have seen it pay off. Arcane Research predicts that this trend will continue into 2022 and will help investors spot “buy the dip” opportunities in the coming year.
Presently, the Fear & Greed Index is trending low at around 40, indicating that investors are fearful of the market.
Crypto total market cap crumbles to $2.2 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Institute of Entrepreneurship Development, charts from Arcane Research and TradingView.com
Crypto Market Drops Back Into ‘Extreme Fear’ As Prices Struggle
The crypto market has continued to struggle after running out of steam with its last rally. During the last lap of the year, the market as a whole is not doing too well, although prices of cryptocurrencies are way higher than they were this time last year. Nonetheless, there have been some interesting trends that have emerged with the market crash that has seen prices stagnate at this time.
The Fear & Greed Index has shown that market sentiment has gone into the extreme negative once again. With prices of top assets like bitcoin and ethereum trading below important support points, sentiment has fluctuated widely in the market but has mostly stayed in the negative. This time around, market sentiment has dropped low and landed in the ‘extreme fear’ territory.
Related Reading | Algorand, Solana, And More Lead List Of Biggest Losing Altcoins
Crypto Market Basking In Fear
The crypto market has spent a good portion of the month of December in the fear territory. Market prices haven’t been the most favorable for the month and investors remain incredibly wary of getting into the market at such a time. Others have however seen this as a buying opportunity like in the case of MicroStrategy, which bought an additional 1,434 BTC bringing its total holdings to 122,480 BTC.
The aggregate for the month of November came out to neutral on the sentiment side of things after a tumultuous end to an otherwise wonderful beginning of the month. That has spilled into December as Christmas rolls around.
Market goes into extreme fear | Source: alternative.me
Yesterday the Fear & Greed Index had peaked at 29 on the chart, putting the market in the fear territory. This was up a bit from last week where the market spent long stretches in extreme fear. Today, market sentiment again rolled into the extreme fear territory with a low 23 on the chart.
The index being this low shows that there are low buying pressures in the market and high selling pressures. Sell-offs are still underway in various digital assets that have seen their prices dip into the red. As the market heads into the weekend which is usually characterized by low volatility, will the market be able to pull itself out of extreme greed?
Bitcoin, Ethereum Suffer Losses
Bitcoin had made a splash in the market when it had hit its new all-time high slightly above $69,000 at the beginning of November. This had sent the crypto market on what would be a memorable bull run as Ethereum came close to hitting the $5,000 mark not too long after. But this would only be short-lived as the downtrend had begun not too long after.
Related Reading | Crypto Bull Cathie Wood Says Ethereum Is More Undervalued Than Bitcoin
For Bitcoin, the digital asset had lost as much as $10,000 in a single day that sent it towards the low $40,000s. Ethereum on the other hand had held out for a while but succumbed to the downtrend in time.
Bitcoin is now trading well below $50,000 after failing to hold above this price point this week. Ethereum is now trading below $4,000, a crucial support point for the digital asset. At the time of writing, bitcoin is trading at $47,141 and ethereum is trading at $3,826.
Crypto total market cap at $2.16 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Bitcoin News, chart from TradingView.com
17% of Australians now own crypto, totaling $8B between them: Survey
Bitcoin remains the most popular cryptocurrency in Australia, with 9% of Aussies currently hodling it.
Crypto Long & Short: GameStop, Dogecoin y un nuevo paradigma de mercado
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