Bitcoin’s price has continued to plunge after the correction from $47k happened. We saw periods of accumulation and a few jumps on the way, but the general trajectory has been down. And now, the latest fall below $34k has instilled ‘Extreme Fear’ in the Fear and Greed Index of Bitcoin. The last time we saw this much fear in the market was during the first correction from $69k to $33k.
Bitcoin Fear and Greed Index in ‘Extreme Fear’
Extreme fear in the market is good for Bitcoin as these are times when we often see a reversal. Even though the latest correction solidifies that we are very likely in a bear market, small rallies could happen. The current index score is 11 compared to 28 last week. In this correction, a lot of critical support levels have broken along the way, and that makes it difficult for BTC to jump back. And small positive developments in the industry won’t help.
The funding rates of Bitcoin and Ethereum on most major exchanges are still positive, which shows that despite extreme fear, more long positions are open. Even though the rates are not at the extreme, we can still see that the bearish sentiment hasn’t taken over completely. However, for altcoins, the case is different as the number of exchanges with negative funding rates is higher. We can also look at Solana’s funding rates here, which shows that the latest outages have created a strong negative sentiment for the cryptocurrency.
Stock markets and Federal Reserve funding rates
Crypto markets seem to have a strong correlation with the stock markets around the world. Whenever there is a rise in these markets, crypto also increases in price and vice versa. Well, in the last week, NASDAQ and SENSEX have also fallen quite a lot, and Bitcoin has also corrected more than 10%. The funding rate increase by 50 basis points also affected the Bitcoin price and has resulted in more sell pressure.
Whales seem to be selling their Bitcoin in the market much more than retail investors. Cryptoquant’s data shows that retail investors have held their nerves much better than whales during this correction.
What are your thoughts as Bitcoin Fear and Greed Index is in ‘Extreme Fear’? And are you worried about the bear market or see this as an opportunity? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: India’s Finance Minister calls anonymity in blockchain a risk factor.
