The Crypto Fear & Greed Index — an indicator that tracks market sentiment toward Bitcoin and crypto — has fallen to “extreme fear,” its lowest level since January 2023. 

The tumbling score came as the price of Bitcoin failed to break above the $60,000 mark for the second time in the last 48 hours.

In a July 11 post on X, crypto and forex trader Justin Bennett told his 111,000 followers that Bitcoin’s price level had rejected $60,000 “yet again,” noting the formation of a potential “rising wedge,” which suggests further downside in the coming days.

Bitcoin rallied as high as $59,485 on July 10 before tumbling back down to $57,000 in the following 12 hours. On July 11, BTC briefly rallied to $59,529 again but failed to hold at that level.

Bitcoin is changing hands for $57,499 at the time of writing, down 23% from its all-time high notched on March 14, according to TradingView data.

Why has the price of Bitcoin stayed down?

Recent negative sentiment has been linked to news that Mt. Gox has started paying back its creditors since July 5, potentially unleashing up to $8.5 billion worth of Bitcoin onto the market.

Additionally, much of Bitcoin’s downward price action has been linked to large sales from the German Government, which has transferred 16,254 BTC — worth $935 million at current prices — to market makers and exchanges in recent days, according to Arkham intelligence data.

The Crypto Fear & Greed Index factors in market volatility (25%), trading volume (25%), Bitcoin’s dominance (10%) and trends (10%). The index also previously accounted for market surveys at a weight of 15%, but that metric has been paused.

Bitcoin’s index score has been on a consistent downtrend since it notched a score of 90 “extreme greed” on March 5, when Bitcoin surpassed its previous all-time high price of $69,000 set back in November 2021.

Source : Cointelegraph - Jul 12, 2024