Fear & Greed Index to Lowest Since Bitcoin Traded at $17K in Early 2023

Crypto investor sentiment cratered and is at the most negative levels since the tail end of the 2022 crypto winter as bitcoin's (BTC) plunge below $54,000 pulled down digital asset markets.

$BTC is sitting at $57K, but we are currently in a significant downtrend.

The widely followed Crypto Fear & Greed Index, shows market enthusiasm towards BTC and other large cryptocurrencies, with 0 being extreme fear and 100 translating to extreme greed. The gauge dropped to 29 on Friday, its deepest dive into the fear zone since early January 2023 when bitcoin was trading around $17,000 after 2022's crushing bear market.

Extreme levels of fear may present buying opportunities, but with the current climate I hesitant to be bullish. The key catalysts behind the downturn was the unloading of seized bitcoin by German and U.S. governments, along with preemptively selling as the estate of defunct Mt. Gox exchange is going to start to refund investors this month.

With all the negative news and broader system stresses the selling pressure is unlikely to abate in the short-term. As you read the German government still holds some $2.2 billion worth of BTC, the U.S. government has over $12 billion and the Mt. Gox estate has more than $8 billion of assets that will likely be unloaded into the system.

I'm happy to see we recovered a but from yesterday, but I would be careful in the near term.

Posted Using InLeo Alpha