Bitcoin Fear & Greed Index Drops Amid Market Adjustments

CryptoQuant analyst Axel reported a sharp drop in the Bitcoin Fear & Greed Index from around 80% to 44.9%, amid market volatility and significant forced liquidations.

This decline reflects shifting investor sentiment, raising concerns of market instability. Further decreases in liquidation volume may signal an approaching end to the current deleveraging phase.

Bitcoin Index Plummets, Triggers $205 Million in Liquidations

CryptoQuant analyst Axel reported a sharp drop in Bitcoin’s Fear & Greed Index from extreme greed to 44.9%, highlighting a market shift. This downturn was matched by a recent peak in Bitcoin’s price near $97,000 before liquidations occurred.

The drop below the neutral threshold of the index indicates a substantial change in market sentiment. The event’s implications are evident in the $205 million in liquidations, predominantly of long positions, as observed in the market’s spot oscillator data.

The shift in the Bitcoin Fear & Greed Index from ~80% to 44.9% coincides with Bitcoin’s price nearing $97,000 and highlights the recent $205 million in liquidations. — Axel, Analyst, CryptoQuant

Market reactions have been immediate with no significant statements from key industry figures or authorities noted. The overall sentiment remains on high alert, with analysts monitoring potential further decreases in the index.

Regulatory Clarity Sought Following Bitcoin’s 14% Price Drop

Did you know? The Fear & Greed Index has been a vital tool for indicating market shifts, reaching extreme greed only thrice in the last two years, marking phases of intensive speculation.

Bitcoin, according to CoinMarketCap, currently trades at $93,052.25 with a market cap of $1.86 trillion and a 24-hour trading volume standing at $37.65 billion. Despite recent fluctuations, Bitcoin holds a market dominance of 59.16%. Over the past 90 days, its price has decreased by 14.29%.

Coincu’s research indicates the potential for regulatory frameworks to address market volatility. Historical trends suggest markets might stabilize if the index recovers above 50%. Similar periods have prompted calls for clear guidelines from regulatory bodies to prevent overwhelming market shock.

The markets might stabilize if the index recovers above 50%.