Bitcoin Traders Sink Into ‘Fear’ As Price Crashes Below $58,000
05 Juillet 2024 - 5:00AM
NEWSBTC
Data shows that Bitcoin traders’ sentiment has declined into ‘fear’
after the price crash the cryptocurrency has seen during the past
24 hours. Bitcoin Fear & Greed Index Is Now Suggesting A
Fearful Market The “Fear & Greed Index” is an indicator created
by Alternative that tells us about the average sentiment currently
held by traders in the Bitcoin and wider cryptocurrency market. The
index uses a scale from zero to a hundred to represent the
sentiment. The score is calculated based on five factors:
volatility, trading volume, social media sentiment, market cap
dominance, and Google Trends. Related Reading: These Are The
Altcoins In Buy Zone, Analytics Firm Reveals All values of the
indicator above 53 signify the presence of greed among the
investors, while those below 47 imply fear in the market. The
region between these two cutoffs naturally corresponds to a neutral
mentality. Now, here is what the Bitcoin Fear & Greed Index
looks like currently: As is visible above, the Bitcoin Fear &
Greed Index has a value of 44, suggesting that the sentiment is
just inside the fear territory. This is a change from what it has
been like during the last few days. The chart below shows how the
indicator’s value fluctuated over the past year. The graph shows
that the Bitcoin Fear & Greed Index had been in neutral
territory during the first three days of this month, but today, on
the fourth, the sentiment has plunged. The reason behind this
worsening mentality is the crash that the cryptocurrency’s price
has witnessed during the past day, which has taken its price under
the $58,000 level. It’s also visible in the chart that the neutral
sentiment in the first three days of July showed a sharp
improvement over how June had ended. The metric had hit a low of 30
on two occasions to end the month as a culmination of the bearish
momentum BTC had been facing. As the bearish winds seem to be
picking back up for the asset now, the recovery in the sentiment
may be lost soon. This may not entirely be, however, bad news for
the coin. The Bitcoin price has historically tended to move against
the crowd’s expectations. The chances of such a contrary move to
take place grow the larger this expectation becomes. That is the
more the Fear & Greed Index points in any direction. Major tops
and bottoms have generally occurred when the asset has been inside
the extreme greed and fear regions, respectively. Extreme greed is
the territory where the index attains values higher than 75.
Similarly, extreme fear occurs under 25. Related Reading: Why Did
Bitcoin Plunge Under $58,000? On-Chain Data Says This If the
indicator’s value continues to decline from here, it falls into the
extreme fear it could be to watch for, as they may also lead
towards a potential bottom for Bitcoin this time. BTC Price At the
time of writing, Bitcoin is trading at around $57,900, down almost
6% in the past seven days. Featured image from Dall-E,
Alternative.me, chart from TradingView.com
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