Home / Business and Economy / Bitcoin Plunges to Extreme Fear Levels
Bitcoin Plunges to Extreme Fear Levels
10 Jun
Summary
- Bitcoin price neared $62,500 as Fear and Greed Index hit 10.
- Momentum indicators weakened before Bitcoin price broke down.
- Extreme fear sentiment has historically marked Bitcoin cycle bottoms.
Bitcoin's price recently dropped to approximately $62,500, coinciding with the Crypto Fear and Greed Index reaching an extreme fear reading of 10. This sharp decline in sentiment mirrors levels seen near previous significant cycle bottoms in Bitcoin's history.
Technical analysis indicates that Bitcoin's momentum indicators began to weaken well before the price experienced a breakdown. This weakening was accompanied by a decrease in spot demand, as evidenced by cumulative volume delta turning negative, suggesting sellers dominated exchanges.
The Crypto Fear and Greed Index, which measures volatility, momentum, volume, and social signals, has rapidly fallen from a neutral reading of 47 just a month ago to its current extreme fear level. This prolonged period of pessimism is comparable to the sentiment observed after the FTX collapse.
Historical data, visualized through charts, shows that Bitcoin's price has often found major lows when the Fear and Greed Index reached such extreme lows. Notable instances include the late 2018, March 2020, and the 2022 bear market bottoms. The current reading places Bitcoin's sentiment alongside these critical historical points, although some analysts caution that prices have continued to decline after similar fear readings in the past.
