The Crypto Fear & Greed Index has plummeted to its lowest level since October 15, indicating a significant shift in market sentiment towards Bitcoin and crypto. The index, which tracks market sentiment, has dropped to 65, still within the “greed” territory but down from its peak of 94 on November 22. This decline comes as the Bitcoin price has fallen 13.7% in the last 12 days, sparking warnings of a potential “huge dump” among traders.
Market Sentiment Shifts
The Crypto Fear & Greed Index has consistently remained above 70 throughout November and December, following the US election and the rise of pro-crypto politicians. However, the recent decline suggests a shift in market sentiment, with traders becoming increasingly cautious. The index is calculated based on various signals, including Google Trends, surveys, market momentum, and social media.
Analysts Predict Volatility and Correction
Markus Thielen, analyst and head of research at 10x Research, has predicted an increase in volatility soon, contradicting some analysts who expect a “timed parabolic move” leading up to the Trump inauguration. Veteran trader Peter Brandt has speculated that Bitcoin may be moving towards a “Hump Slump Bump Dump Pump” pattern, which suggests a price movement with an initial rise, followed by a decline, recovery, further drop, and rebound.
Bitcoin’s Performance
Despite the recent slump, Bitcoin remains the top-performing asset of the last decade, outpacing traditional assets by over 26,000%. According to Prem Reginald, a CoinGecko blockchain researcher, Bitcoin has returned 129% in 2024, followed by gold with 32.2% and the S&P 500 with 28.3%.
Source: Cointelegraph.com
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