The index fell 21 points on June 24, entering the “Fear” zone, marking one of the biggest day-to-day drops in recent years.
The Crypto Fear and Greed Index, which measures market sentiment for Bitcoin and the broader cryptocurrency industry, has reached its lowest score in 18 months. The index fell 21 points on June 24, entering the “Fear” zone. This marks one of the biggest day-to-day drops in recent years.
🚨 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
— CryptoRank.io (@CryptoRank_io) June 25, 2024
The Crypto Fear and Greed Index gauges people’s feelings about the cryptocurrency market by analyzing price changes, trading volume, Bitcoin’s market share, and online trends. Since March 5, when Bitcoin hit $69,000 and the index showed “Extreme Greed” with a score of 90, the score has been declining.
The index hasn’t fallen below 30 since January 11, 2023, when Bitcoin was trading at $17,200, two months after the collapse of the crypto exchange FTX. A week ago, the score was 74 in the “Greed” zone. Bitcoin hit a seven-week low on June 24 and is currently trading at $60,300.
Factors Contributing to Market Fear
Several factors have contributed to this shift in sentiment. Substantial outflows from spot Bitcoin exchange-traded funds (ETFs) in the United States have occurred over the last ten trading days, totaling more than $1 billion.
Additionally, there are concerns that Mt. Gox, the infamous crypto exchange that collapsed years ago, might be preparing to sell $8.5 billion worth of Bitcoin to its creditors. Such a massive sell-off could significantly impact market sentiment. Germany has also started selling some of its Bitcoin reserves, adding to the negative sentiment.
Moreover, Bitcoin miners have been selling off more Bitcoin than usual amid a tumbling network hashrate, which may have also weakened market sentiment.
These combined factors have triggered significant investor anxiety, pushing the Crypto Fear and Greed Index into “Fear” territory. A technical and on-chain analyst, Ali Martinez, addressed the current market sentiment, stating on X, “Crypto market sentiment has turned into fear. be greedy when others are fearful!”
#crypto market sentiment has turned into fear. be greedy when others are fearful! pic.twitter.com/Cysesda5PD
— Ali (@ali_charts) June 25, 2024
The Crypto Fear and Greed Index’s drop into the “Fear” zone reflects significant anxiety among investors. While some believe the reaction may be overblown, the combination of ETF outflows, potential large-scale Bitcoin sales, and actions by Bitcoin miners have collectively driven the market into a state of fear.