Originally published on: August 06, 2024
Recent reports show that the Crypto Fear & Greed Index has plummeted into the “Extreme Fear” zone, a level not seen in the past two years. This drop comes as United States spot Bitcoin exchange-traded funds (ETFs) experienced outflows totaling $168.4 million on Aug. 5.
On that day, the sentiment index for Bitcoin and the broader cryptocurrency industry hit a low of 17 out of 100, marking a significant decline from its score of 67 just a week prior. The massive outflows were primarily from popular funds like the Grayscale Bitcoin Trust and the ARK 21Shares Bitcoin ETF.
In contrast, spot Ether (ETH) ETFs saw a surge in inflows, with BlackRock’s iShares Ethereum Trust leading the way with $47.1 million. VanEck and Fidelity also recorded substantial inflows for their Ether products.
The market sentiment turned sour when both Bitcoin and Ether suffered significant losses of 10% and 18%, respectively, in just a two-hour window on Aug. 5. This led to the liquidation of over $600 million in leveraged long positions, causing a domino effect that impacted altcoins and the US stock market as a whole.
As fears of a recession loom and concerns over weak employment data persist, observers like independent trader Bob Loukas are describing the recent market events as a once-in-a-decade occurrence. The crypto market witnessed over $500 billion in value being wiped out in just a matter of days.
Despite the grim outlook, some analysts believe Bitcoin could find a bottom around the $40,000 to $45,000 range. However, caution is advised when making predictions in such a volatile market.
Since hitting a low of $49,780 on Aug. 5, Bitcoin has shown signs of recovery, currently trading at $55,680 and up 11.85% according to CoinGecko data.
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