The Crypto Fear and Greed Index, used to gauge market sentiment for Bitcoin (
BTC
) and the wider cryptocurrency sector, has plummeted to its lowest level in almost 18 months.
On June 24, the index dropped by 21 points, entering the “Fear” zone — marking one of the most significant day-to-day declines in recent years. The last time it was in the Fear zone (with a score between 24 and 50) was around seven weeks ago on May 3, but it had not dropped below a score of 30 since January 11, 2023, when Bitcoin was priced at $17,200, just two months after the collapse of crypto exchange FTX.
Last week, the score was at 74 in the “Greed” zone. Bitcoin is currently trading at $60,300 after hitting a seven-week low on June 24.
The negative sentiment has been triggered by outflows from spot Bitcoin exchange-traded funds, with over $1 billion being withdrawn over the last 10 trading days. Additionally, there is news that Mt. Gox could be preparing to sell $8.5 billion worth of Bitcoin to its creditors, while Germany has also started selling some of its Bitcoin reserves.
However, an executive at cryptocurrency investment firm Galaxy Digital believes that the market may be overreacting to the Mt. Gox concerns.
Bitcoin miners have been selling off more Bitcoin than usual as the network hashrate tumbles, which may have also contributed to the weakening market sentiment.
The Crypto Fear & Greed Index takes into account market volatility (25%), trading volume (25%), Bitcoin’s dominance (10%), and trends (10%). It used to factor in surveys (15%) — however, this metric is currently paused.
The score has been mostly declining since it reached a score of 90 “Extreme Greed” on March 5, when Bitcoin surpassed its previous all-time high price of $69,000 set back in November 2021.