Crypto market turns into a sea of red as fear overtakes greed

On August 17, the cryptocurrency market has taken a downward turn, triggered by Bitcoin’s (BTC) plunge to a new low of under $28,500. 

This decline coincides with a significant shift in investor sentiment, as ‘fear’ takes center stage, replacing ‘greed’ as the previously prevailing emotion. 

The Crypto Fear and Greed Indicator over on CoinStats displayed that the market sentiment is currently indicated as ‘50 Fear,’ compared to ‘52 Greed’ it displayed on August 16. 

Interestingly, crypto trading volume increased during that period by more than 10% to $44.5 billion. 

This bearish sentiment is reflected in the negative change in the crypto market cap, which dropped by $22 billion over the past 24 hours to $1.17 trillion, according to data retrieved by Finbold. 

Why is BTC down?

Unsurprisingly, the negative change in market sentiment and a drop in the crypto market cap was led by Bitcoin’s latest price decline.

Notably, the maiden crypto asset was trading down over 2% at the time of publication at $28,558.

BTC briefly dipped $28,428 – the lowest since June – before recovering above $28,500. 

One of the primary contributors to the latest BTC downturn is the Bitcoin futures market. Namely, over the past two days, long positions worth $24.76 and $20.17 million have been liquidated, Coinglass data showed.

Open interest – the total number of outstanding futures contracts on Bitcoin – had accumulated rapidly prior to the BTC price collapse. 

The current state of the Bitcoin and cryptocurrency market indicates reduced liquidity compared to an extended period, elevating BTC’s susceptibility to volatile and substantial price swings.

Altcoins’ performance

Meanwhile, other cryptocurrencies have been also significantly affected by fear and bearish mood, with Ethereum (ETH), Binance Coin (BNB), and XRP (XRP) losing 2.08%, 1.65%, and 2.62%, respectively.

Amid the drop, ETH fell below its key support level of $1,800.

The largest declines were recorded in Sei (SEI), which made its debut on August 16, Conflux (CFX), and Shiba Inu (SHIB) at 32%, 9.5%, and 8.7%, respectively. SHIB’s drop comes due to a sloppy launch of the Shibarium upgrade, during which over $1.7 million got stuck in the layer-2 network. 

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