On June 24, the Crypto Fear and Greed Index plummeted by 21 points, plunging into the “Fear” zone. This marked one of the largest single-day drops in recent years. The last time the index entered the “Fear” zone (with a score between 24 and 50) was about seven weeks ago, on May 3.
Prior to this, the index hadn’t dipped below 30 since January 11, 2023, when Bitcoin was trading at $17,200, just two months after the collapse of the crypto exchange FTX.
Just a week ago, the index was still in the “Greed” zone with a score of 74.
Currently, Bitcoin is trading around $60,300 after hitting a seven-week low on June 24. Negative sentiment has arisen amidst significant sell-offs of over $1 billion in Bitcoin ETFs over the last 10 trading days, news that Mt. Gox might be preparing to sell $8.5 billion worth of Bitcoin to settle with its creditors, and Germany starting to liquidate part of its Bitcoin reserves.
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However, an executive at the cryptocurrency investment firm Galaxy Digital believes the market may be overreacting to the concerns surrounding Mt. Gox.
Additionally, Bitcoin miners have been selling more Bitcoin than usual as the network’s hashrate tumbles, further contributing to the weakening market sentiment.
The Crypto Fear & Greed Index factors in elements such as market volatility (25%), trading volume (25%), Bitcoin’s dominance (10%), and market trends (10%). Previously, it also considered survey results (15%), but this metric is currently paused.
The index has been trending downward since reaching an “Extreme Greed” score of 90 on March 5, when Bitcoin surpassed its previous all-time high price of $69,000 set back in November 2021.
