The Fear and Greed Index, a well-known sentiment indicator for Bitcoin (BTC), recently entered “extreme fear” territory with a score of 25 out of 100. The index fell to such a low level for the first time in the last 18 months. Such a decline in the index was seen at a time when the cryptocurrency market was recovering from the shocking collapse of the FTX exchange.
Mt. Gox and the German Government Cause Extreme Fear
The cryptocurrency market right now is Mt. It faces significant problems, including refunds from the Gox exchange and major sales pressure from the German government's continued sale of 50,000 BTC seized in an operation in January. These events have caused sharp price movements across the cryptocurrency market and the Fear and Greed Index falling to the level of 25.
As it is known, the price of Bitcoin rose to 59 thousand 516 dollars on July 11, due to the impact of lower-than-expected US inflation data, which raised hopes for more than one interest rate cut this year. Despite this positive price momentum, the largest cryptocurrency started to retreat by not exceeding the resistance level at $ 60 thousand.
The main trigger for this decline in Bitcoin's price was the additional pressure of another significant Bitcoin sale by the German government. On July 11, the German government sent $286 million worth of BTC to various trading platforms. The German government, which wanted to liquidate all of its BTCs, lastly sent 2,700 BTCs to various trading platforms earlier today, ensuring that the sales pressure continued.
Inflows into Spot Bitcoin ETFs Could Be Supportive for the Market
There is a positive development in the form of increased inflows into spot Bitcoin exchange-traded funds (spot Bitcoin ETFs) in the US amid strong market-wide selling pressure. There were approximately $79 million in new inflows into these investment products on July 11, with BlackRock's spot ETF IBIT accounting for the majority of inflows. This fund flow is expected to have a supportive effect against the sales pressure that hit the market in general.
According to data from CoinMarketCap, Bitcoin is trading around 57 thousand dollars at the time of writing.
