Bitcoin's Decline Mirrored in 100-Day Low for Crypto Fear & Greed Index Following ETF Approvals
Summary:
The Crypto Fear & Greed Index has reached a 100-day low as Bitcoin continues its downward trajectory following the US approval of spot exchange-traded funds. Hitting a score of 48 on January 24, the index signifies a neutral market sentiment, a stark drop from 'Greed' felt the previous week. This comes as Bitcoin's price drops to under $40,000 post-ETF approval, and massive outflows are seen from one ETF, the Grayscale Bitcoin Trust.
The Crypto Fear & Greed Index has currently reached a low point not witnessed in the past 100 days, as Bitcoin (BTC) continues its downward trend in the wake of the approval of spot exchange-traded funds (ETFs) in America. On January 24, the index recorded a score of 48, which puts it within the "Neutral" sentiment scope — a decrement of two points from the previous day, and a staggering 15 point decline from the same day the previous week when sentiment indicated "Greed." Reaching a 100-day low, the index last marked a score of 47 on October 16, 2023, when Bitcoin was selling slightly above $28,500 as per Cointelegraph Markets Pro. A yearly graphic of the Crypto Fear & Greed Index indicates an improvement in sentiment prior to the Bitcoin ETFs approval, and a decrease afterwards. The index is built drawing from information sourced from six key market indicators to measure daily crypto market sentiment: volatility (25%), market momentum, and volume (25%), social media (15%), surveys (15%), Bitcoin dominance (10%) and trends (10%). Related news: Following spot Bitcoin ETF approvals, Coinbase's stock has been downgraded to 'underweight' by JPMorgan. Bitcoin reached a two-year peak of nearly $47,000 on January 8, a few days before the approval of multiple spot Bitcoin ETFs in the U.S. Interestingly, Bitcoin's price has decreased to under $40,000 since these new ETF products were approved. The Grayscale Bitcoin Trust (GBTC), an ETF, has reported over $2 billion in outflows since its conversion to an ETF, causing several days of net outflows from the 10 spot Bitcoin ETFs. The index's readings demonstrate that sentiment was strongly in the "Greed" phase from end of October, as market optimism was buoyed by the prospect of spot ETF approvals. On January 1, the index reached a score of 76, the day after multiple Bitcoin funds were approved, its highest score since marking 77 on November 11, 2021 — the day after Bitcoin hit its all-time high above $69,000.
Published At
1/24/2024 4:24:03 AM
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