Crypto market sentiment has taken a hit as the Fear & Greed Index dropped to its lowest level in a while. This indicator, which measures market enthusiasm towards cryptocurrencies, showed extreme fear with a score of 29. The last time it was this low was back in early January 2023 when bitcoin was trading at $17,000.
Analysts are warning that there could be further downside for bitcoin’s price due to various factors. The selling pressure is being driven by the unloading of seized bitcoin by the German and U.S. governments, as well as the Mt. Gox estate refunding investors. These entities hold billions of dollars worth of BTC, creating a significant overhang in the market.
Rachel Lin, CEO of SynFutures, pointed out that the selling pressure is likely to continue in the short term. The direction of bitcoin’s price will heavily depend on how much Mt. Gox users decide to sell. If there is a large amount of selling, we could see bitcoin drop to the $50,000 level soon.
Markus Thieled, founder of 10x Research, adjusted his price target for bitcoin to $50,000 and noted that August and September are historically challenging months for the cryptocurrency. However, he mentioned that a potential interest rate cut by the Federal Reserve in September could spark a rally in bitcoin.
Overall, the market sentiment is currently negative, and investors are cautious about the future price movements of bitcoin and other cryptocurrencies. The uncertainty surrounding the selling pressure from various entities is keeping the market on edge. It remains to be seen whether the market will stabilize or if further downside is on the horizon. Investors are advised to proceed with caution and closely monitor the developments in the cryptocurrency space.