Fear And Greed Index For Bitcoin Has Dropped To $34K, Causing ‘Extreme Fear’

The popular Fear and Greed Index has once again slipped into high fear area as bitcoin’s price continues to fall. Indeed, the metric hasn’t been this low since late January, when the asset’s price fell to $33,000.

Fear takes control Bitcoin

The environment surrounding the principal cryptocurrency has been gloomy since the end of March. At the time, Bitcoin was close to $50,000, but it failed and began to lose value steadily. BTC dropped by almost $10,000 in April alone, closing the month below $40,000.

So far, May has been a disaster. Following the recent FOMC meeting, in which the Fed stated it would hike interest rates by 50 basis points instead of 75, bitcoin surged to $40,000, but the rally was short-lived.

Soon after, the cryptocurrency fell below $36,000, and the situation exacerbated in the last 24 hours, when it dropped to about $34,000, its lowest level since late January.

This severe price drop, as indicated by the Bitcoin Fear and Green Index, resulted in a shift in overall market mood. It assesses the general attitudes about the asset by evaluating community social media posts, polls, volatility, trading volume, and so on. The measure displays the final results, which range from 0 (severe dread) to 100 (complete fear) (extreme greed).

It has been in a fear territory since mid-April, but the latest price dumps drove it to extreme fear. In fact, by displaying 18 right now, the Index is in its lowest position since the aforementioned late-January drop.

Why Are Whales Being Sold?

While retail investors are typically the ones to react more emotionally and dispose of their assets during sell-offs, CryptoQuant data shows a bit of a different story this time.

The analytics resource’s latest research indicates that the number of larger players and whales sending between 10 and 10,000 BTC to exchanges was more significant than smaller investors depositing from 0,01 BTC to 10 BTC.

As such, CryptoQuant concluded that whales could have an “open position on the stock market and realizing profit in crypto could mean reducing risky assets to secure their positions on stocks.”

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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