- Market confidence in digital assets hits its lowest since February.
- Fear and Greed Index drops to 10, signalling extreme fear among investors.
Market confidence in digital assets is at its lowest level since late February due to the macroeconomic concerns that keep weighing on investor psychology. The most commonly referred to Fear and Greed Index showed an extreme fear reading of 10 this weekend, which is the lowest value it has been in over eight months.
Bitcoin’s price went down below the $95,000 level on Friday and has been weakly trying to go back above $96,000 ever since, according to market data. The last sentiment low was at the end of February when Bitcoin exchange-traded funds had a record single-day withdrawal of more than $1.1 billion in capital. At that time, Bitcoin’s price fell from $102,000 to around $84,000 in a matter of weeks, thus terrifying the market players and institutional investors on a large scale.
Technical Signals Suggest Market Conditions May Improve
Contrary to the pessimistic readings of the sentiment gauges, a number of industry experts are of the opinion that the current downturn is, to a large extent, different from the past market corrections. Bitwise’s European Research Director pointed out that sentiment indicators are not as bearish this time as in previous downturns, even though the price levels are similar or even lower.
The company’s own sentiment measurement tool keeps showing positive divergence patterns that may signal a change in market direction and investor confidence.
In addition, the Bitcoin price chart technical analysis shows a falling wedge pattern with positive divergence indicators that have always led to upward price movements in cryptocurrencies in the past.
An experienced market analyst with 8 years of experience in the industry noted the disconnection of the positive regulatory developments from the negative market sentiment as the most striking feature of the current situation.
Among other things, the recent legislation progress is the end of the long government shutdown; however, the uncertainty about the Federal Reserve interest rate policy is the main factor that is still influencing the prices of cryptocurrencies. Investment strategists say that the lack of a typical year-end rally could be a good thing for the market in the long run, as it would prevent the occurrence of unsustainable price hikes followed by steep corrections.
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Source: https://thenewscrypto.com/crypto-market-sentiment-plummets-to-eight-month-low-amid-price-volatility/
