As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen my fair share of market volatility and trends, from the dot-com bubble to the 2008 global financial crisis. The current state of Bitcoin’s Fear & Greed Index plunging into “extreme fear” territory is a familiar sight that reminds me of those turbulent times.
As a researcher studying the dynamics of Bitcoin, I’ve observed that the Fear & Greed Index, which gauges investor sentiment towards the leading cryptocurrency, has dipped once more into the “extreme fear” zone, recording a score of 25 out of 100. This suggests a prevailing sense of apprehension among Bitcoin investors at present.
On Monday, the value of the cryptocurrency dropped to a daily minimum of $58,134 on the Bitstamp exchange, following this event.
More than $123 million worth of long positions have been liquidated, according to CoinGlass data.
According to U.Today’s report, Bitcoin plunged dramatically on Monday, dropping as low as $49,557 on Bitstamp, influenced by a ripple effect from international stock markets. Yet, it swiftly bounced back in just a few days, aligning with global stocks and reestablishing the $60,000 mark on Thursday. Intriguingly, this was Bitcoin’s most significant surge since February 2022, happening on that day.
The main reason for the bounce-back was the robustness of large-scale investment institutions. Notably, BlackRock’s Bitcoin ETF didn’t witness any new investments even during the stock market plunge.
Despite their efforts, supporters of Bitcoin found it challenging to sustain their advance, as the digital currency couldn’t manage to stay above $60,000. Last week, financial powerhouse JPMorgan cautioned that no significant positive factors for Bitcoin had been factored into the market yet. Their analysts highlighted potential weaknesses in equities, which could potentially have a negative impact on cryptocurrencies as well.
At this moment of my study, both S&P 500 and Nasdaq futures are holding steady. This suggests that the recent downtrend in Bitcoin might not necessarily be a reflection of the stock market movements. I am currently investigating other possible factors influencing Bitcoin’s price action.
Lately, a death cross pattern emerged in the cryptocurrency market for the year 2024, which might signal a potential shift towards a downward trend. Yet, it’s essential to note that this pattern often follows rather than leads price movements because it relies on historical data.
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2024-08-12 08:49