As an experienced financial analyst, I have closely followed the cryptocurrency market for several years now. The recent plunge of the Fear and Greed Index into the “extreme greed” territory with a reading of 25 out of 100 is a stark reminder of the volatile nature of this asset class. This is the first time in 18 months that I have seen such an extremely low reading, which is particularly concerning given the recent market developments.
The Fear and Greed Index, a widely used Bitcoin mood gauge, has recently dropped into the “extreme greed” zone, registering a score of 25 out of 100.
This is the first time in 18 months that the index has recorded such an extremely low reading.
Previously, when a similar event unfolded – the abrupt failure of FTX exchange – the cryptocurrency market was in the process of recuperating from the jolt. As an analyst, I would describe it as navigating through choppy waters to regain its footing.
As a researcher studying the cryptocurrency market, I’ve observed some significant events that have contributed to its recent volatility. Mt. Gox, a historical Bitcoin exchange, has initiated repayments to its creditors following its bankruptcy in 2014. Additionally, the German state of Saxony has been actively selling off its Bitcoin stash accumulated during a police seizure in 2019. These events have intensified the selling pressure on the market, resulting in a downward trend for cryptocurrencies.
Thursdays saw a significant increase in the primary cryptocurrency’s value, reaching $59,516, as a result of unexpectedly low US inflation figures. This development renewed optimism about potential interest rate reductions throughout the year.
Bitcoin’s effort to surpass the $60,000 barrier proved unsuccessful in the end.
Saxony, the entity behind the sale of cryptocurrency, made another significant sell-off on Thursday, transferring approximately $286 million in Bitcoin to various trading platforms. The positive aspect is that Saxony now holds less than 10% of the initially seized Bitcoins from the Movie2k website in January.
A significant inflow of approximately $79 million into Bitcoin exchange-traded funds (ETFs) on Thursday is expected to enhance current market sentiments. Notably, BlackRock’s IBIT ETF received the largest portion of this new investment.
At press time, Bitcoin is changing hands at $57,246, according to CoinGecko data.
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2024-07-12 09:38