Bitcoin
Bitcoin (BTC) Price Drops to $53K, Sending Fear and Greed Index to Lowest Level Since Early 2023
Investor sentiment on cryptocurrencies has fallen to its most negative levels since the end of the 2022 crypto winter, with bitcoin (BTC) drop below $54,000 sent digital asset markets tumbling.
The widely followed Crypto Fear & Greed Index, created by data source Alternative.eushows the market’s enthusiasm for bitcoin and other major cryptocurrencies, with 0 being extreme fear and 100 translating to extreme greed.
The indicator fell to 29 on Friday, its deepest dive into the fear zone since early January 2023, when bitcoin was trading around $17,000 following 2022’s sharp bear market.
The metric notably sent a counter sell signal last March when it hit the 90 level near what turned out to be (so far) the broader crypto market’s 2024 top and bitcoin’s all-time high of around $73,500. Since then, BTC and ether (ETH) are down 25%-30%, while major altcoins are down around 50% and smaller tokens have lost even more.
Extreme levels of fear can present buying opportunities, but the reality is more nuanced and has several factors to consider.
The main catalysts behind the crisis were the offloading of seized bitcoins by German It is US Governmentsalong with the “preventive sale” as a heritage of the extinct Japanese stock exchange Mt. Gox has started refunds investors this month, Rachel Lin, CEO and co-founder of derivatives trading venue SynFutures, said in a market update.
Selling pressure is unlikely to ease in the short term, she said. The German government still holds about $2.2 billion worth of BTC, the U.S. government has more than $12 billion and Mt. Gox’s holdings have more than $8 billion in assets, data from blockchain tracking platform Arkham Intelligence show.
“The direction of bitcoin in the coming days will be determined by the selling pressure from Mt. Gox users,” Lin added.
“The market expects most Mt. Gox users to dump their tokens, but we could see a recovery if the selloff is smaller than anticipated,” she said. “On the other hand, if there is enough selling to push the price lower, we could be looking at the $50,000 level soon.”
Markus Thielen, founder of 10x Research, lowered his price target to $50,000 from $55,000. “This situation could force ETF holders and miners to liquidate more positions,” he said in an emailed note, adding that August and September are historically “challenging months” for bitcoin. However, he added, “if the Federal Reserve cuts interest rates in September, bitcoin could see another attempt at a rally.”