A significant drop has been noted in the Crypto Fear and Greed Index, which gauges the market sentiment for Bitcoin and the wider cryptocurrency sector. The index has stooped to its lowest level in approximately a year and a half. On June 24, the index dipped by 21 points, plunging into the “Fear” territory, marking one of the most substantial day-to-day descents in the current times.
The index was previously in the Fear domain (a score between 24 and 50) about seven weeks prior, but it hasn’t registered a score under 30 since January 11, 2023, a period during which Bitcoin was retailing at $17,200 barely two months post the FTX crypto exchange downfall.
A culmination of events like a potential $8.5 billion market sell-off by Mt. Gox, significant outflows from the United States spot Bitcoin ETFs, and Germany’s decision to sell some of its Bitcoin reserves have led to this negative sentiment around Bitcoin. Moreover, Bitcoin miners selling off more Bitcoin than usual in the face of a tumbling network hashrate may have further fueled a negative market sentiment.
Contrarily, a top executive at Galaxy Digital, a cryptocurrency investment firm, expressed that the market might be slightly overreacting to the impending Mt. Gox sell-off. The sharp change in sentiment comes as Bitcoin currently trades at $60,300, after hitting a seven-week low on June 24.