As volatility grips the sector, the crypto market has been riding a rollercoaster of emotions, fluctuating between neutral, Fear, and greed. Daily figures of significant cryptocurrencies have declined by double digits, indicating that early investors are now encashing their earlier profits.
According to the “Fear and Greed Index,” alternative market sentiment last reached “Greed” on June 24, driven by the SEC’s approval of spot Bitcoin ETFs in January. Nonetheless, Bitcoin’s subsequent decline to $58,000 from $63,000 sufficiently quickly altered the temper to bearish. After fluctuating and touching the $60,000 mark again, the index fell to 30, denoting “Fear.” July started on a neutral note, but the BTC price declined under $50,000.
Source: Alternative
Also Read: Mt. Gox Launches the Long Overdue Bitcoin Repayments to Creditors
Factors Driving Fear in the Market
The primary sources of this “Fear” include the selling by the German government and Mt. Gox creditor repayments. The recent ’59 wake up’ occurred when the German government shifted 16,039 BTC worth slightly over $1 billion, thus precipitating a slump in the process. Alibaba then bought back 3,673 BTC, which further amplified the fluctuations in the market.
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With Bitcoins fluctuating at or less than $58,000, all the online platforms, including X, formerly Twitter, Reddit, Telegram, 4Chan, and Bitcointalk, have been filled with negative outlooks. A ‘back and forth movement’ was observed and illustrated by the Spot On Chain, which contributed to a change in the market.
The fact of such overwhelming FUD, already present in Santiment data, indicates that such configurations usually herald a bounce that disgusts the majority. Meanwhile, spot Bitcoin ETFs saw inflows of $294.8 million on Monday, according to Farside Investors data.
This “Fear and Greed” dance accounts for market volatility. Due to many determinants that affect penny stocks, short-term stock price volatility was likely to catch even an advanced investor off guard. The Fear and Greed Index is at 27, still holding the “Fear” territory for the market.
In conclusion, the crypto market remains highly volatile due to various activities, government regulatory measures, and investors’ attitudes. Finally, new and experienced investors must know the conditions to avoid being caught up in the current volatile market conditions.
Also Read: Whale Alert Detects Major XRP Movement with 150 Million Tokens Transferred
Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. I write extensively on topics such as blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.