Bitcoin Fear and Greed Sentiment Changes to ‘Fear’ Amid Market Downturn

• The measure includes things like market volatility, social media commentary, polls, etc.
• Several cryptocurrency companies were revealed to have ties to the defunct bank.

After a promising start, crypto has taken a beating this year, with external factors being at fault once again being the primary cause. As a consequence, bitcoin and other cryptocurrencies have suffered, contributing to yet another shift in public opinion. Several cryptocurrency-related organizations and projects collapsed last year, leading to price drops, bankruptcies, and heavy investment losses.

In the first few weeks of 2023, Bitcoin (BTC) surpassed $17,000, sparking a small bull run that eventually pushed the asset price beyond $25,000 by February. The widely followed Fear and Greed Index shot up from deep inside “fear” and “extreme fear” to greed after rising by about 50% in this span and setting a new multi-month high.

Investors in Fear Mode

Several cryptocurrency companies, however, were revealed to have ties to the defunct bank, SVB.  Circle, the industry behemoth responsible for the development of the second-largest stablecoin, USDC, is one such company. The native stablecoin dropped below $0.9 after the revelation broke that the company had at least $3.3 billion in SVB, causing a loss of dollar parity.

The price of bitcoin was impacted by all of this and fell all the way to $19,500 yesterday. With this drop, it hit its lowest point in two months. The Fear and Greed Index reflects this inevitable swing in public opinion.

The measure, which includes things like market volatility, social media commentary, polls, etc., fell to 33, indicating a heightened level of fear. For comparison’s sake, it hovered around 55 in February, indicating a greedy mood, and around 50 last week, indicating neutrality.