Crypto Fear and Greed Index Hits Neutral Amid Bitcoin Price Volatility and ETF Uncertainties
Summary:
The Crypto Fear and Greed Index has dropped back to "neutral" levels, marking the lowest it's been since October 2023. This follows shortly after the US approved spot Bitcoin ETFs. The current market sentiment score for Bitcoin is 52 out of 100, as per the index. The uncertainty around spot Bitcoin ETFs' performance and misreported BTC ETF flows contribute to market confusion. Meanwhile, Google searches for "Why is Bitcoin dropping?" have skyrocketed by 1,100% as traders seek understanding of Bitcoin's recent price volatility.
The Crypto Fear and Greed Index has recently descended back to its "neutral" position, last recorded in October 2023, shortly after the landmark approval of spot Bitcoin ETFs in the US. The index reveals that the current market sentiment surrounding Bitcoin sits at 52, out of a possible 100, which is the lowest it's been since October 19 of the previous year when Bitcoin was trading for an approximate average daily price of $31,000.
The transition occurred less than a week post the Crypto Fear and Greed Index momentarily tipping into an "extreme greed" score of 76, during the market anticipation of spot Bitcoin ETFs approval. The fear and greed index compiles and calculates data from six critical market performance indicators on a daily basis, including volatility (25%), market momentum and volume (25%), social media (15%), surveys (15%), Bitcoin’s dominance (10%), and trends (10%).
In the 24 hours following the decision by the Securities and Exchange Commission (SEC), to greenlight spot Bitcoin ETFs, Bitcoin's price rocketed to a high of $49,000. However, by January 12th, Bitcoin had dropped to as low as $41,500, due to profit-driven trading activities. By the time of reporting, Bitcoin had stabilized somewhat and was trading around $42,200, according to TradingView data.
Since their inception, spot Bitcoin ETFs have been the subject of some ambiguity, with contradictory data regarding their performance and apparent inaccuracies in reported BTC ETF flows bringing about further confusion.
Searches on Google for “Why is Bitcoin dropping?” have soared by 1,100% as market players attempt to understand the recent fluctuations in Bitcoin's value. Furthermore, MakerDAO is planning to bring back the 'DeFi summer', according to reports in a recent magazine.
Published At
1/15/2024 4:24:36 AM
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