Bitcoin’s market sentiment has taken a sharp downturn, as the Crypto Fear & Greed Index plummets to “extreme fear” for the first time since January 2023. This decline in sentiment comes as Bitcoin struggles to reclaim the crucial $60,000 price level, failing twice in the past 48 hours.
The Crypto Fear & Greed Index, which measures market sentiment towards Bitcoin and other cryptocurrencies, has dropped to 25, “extreme fear,” its lowest point since January 2023. This decline coincides with Bitcoin’s inefficiency to break past the $60,000 threshold twice within 48 hours.
On July 11, Bitcoin rallied to $59k but quickly fell back to $57,000 within 12 hours. The following day, it briefly reached $59,529 but again failed to hold, currently trading at $57,259.
In the meantime, crypto and forex trader Justin Bennett tweeted that Bitcoin faced rejection at $60,000 once again. He further noted the potential formation of a “rising wedge pattern”, which could indicate further downside for Bitcoin in the coming days.
The recent negative sentiment around Bitcoin is partly due to the news that Mt. Gox has started repaying its creditors, potentially releasing up to $8.5 billion worth of Bitcoin into the market. Additionally, large Bitcoin sales by the German government have contributed to the downward pressure.
According to Arkham intelligence data, the German government recently transferred 16,254 BTC (worth approximately $935 million) to market makers and exchanges.
Despite the current market fall, there may be hope for recovery. However, with the German government nearly out of its Bitcoin holdings, the market might stabilize as the selling pressure eases.
Additionally, recent economic data could influence Bitcoin’s future price. The Consumer Price Index (CPI) for June showed a decrease in US inflation to 3%, with core inflation at 3.3%.
This lower inflation rate may prompt the Federal Reserve to consider rate cuts, which could provide a boost to Bitcoin’s price.
Also Read: Crypto Market Analysis: Is the Bear Run Finally Over?
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