The Crypto Fear and Greed Index, a measure of market sentiment for Bitcoin (
BTC
) and the wider cryptocurrency industry, has plunged to its lowest level in nearly 18 months. On June 24, the index dropped by 21 points, entering the “Fear” zone, marking one of the largest day-to-day declines in recent years. The last time it fell into the Fear zone was around seven weeks ago, on May 3, and it hasn’t fallen below 30 since January 11, 2023, when Bitcoin was trading at $17,200, just two months after the collapse of the crypto exchange FTX.
At the same time last week, the index was at 74 in the “Greed” zone. Bitcoin is currently trading at $60,300, after hitting a seven-week low on June 24. Negative sentiment has arisen due to outflows from spot Bitcoin exchange-traded funds, which amounted to over $1 billion in the last 10 trading days. There is also concern that Mt. Gox could be preparing to sell $8.5 billion worth of Bitcoin to its creditors, and Germany has started selling some of its Bitcoin reserves. However, an executive at cryptocurrency investment firm Galaxy Digital believes that the market may be overreacting to the Mt. Gox concerns.
Bitcoin miners have been selling off more Bitcoin than usual due to a declining network hashrate, which may have further weakened market sentiment. The Crypto Fear & Greed Index takes into account market volatility (25%), trading volume (25%), Bitcoin’s dominance (10%), and trends (10%). It used to factor in surveys (15%), but that metric is currently paused. The score has mostly been trending downward since it reached 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.