The Fear & Greed Index, a popular sentiment gauge for Bitcoin (BTC), has plunged back into “extreme fear” territory, now sitting at just 25 points out of 100. This comes as Bitcoin, the leading cryptocurrency, dropped to an intraday low of $58,134 on Monday, according to data from the Bitstamp exchange. The sharp decline led to over $123 million in long positions being liquidated, as reported by CoinGlass.
This marks yet another turbulent period for Bitcoin, which endured a massive crash last Monday. The cryptocurrency collapsed to a low of $49,557 on Bitstamp, driven by contagion fears from global stock markets. Despite this, BTC managed a rapid recovery, reclaiming the $60,000 level by Thursday. This swift rebound was Bitcoin’s biggest rally since February 2022, showcasing the market’s resilience.
Institutional investors played a crucial role in Bitcoin’s recovery. Notably, BlackRock’s BTC exchange-traded fund (ETF) did not experience any outflows, even during the market turmoil. This stability from large players helped support BTC’s rebound, but the bulls have struggled to maintain momentum. BTC failed to hold above the $60,000 mark, leading to renewed concerns among investors.
JP Morgan’s Bitcoin Warning
Adding to the uncertainty, banking giant JPMorgan recently warned that Bitcoin lacks any obvious bullish catalysts that haven’t already been priced in. The analysts highlighted the vulnerability of equities, a factor that could negatively impact the broader cryptocurrency market. However, with S&P 500 and Nasdaq futures remaining flat, BTC’s recent bearishness seems to be disconnected from stock market movements.
Bitcoin also recently formed its first death cross of 2024, a technical indicator that occurs when the 50-day moving average crosses below the 200-day moving average. While often seen as a bearish signal, the death cross is typically a lagging indicator, reflecting past price action rather than predicting future trends.
As BTC navigates this period of extreme fear, traders and investors are left to ponder the market’s next move. Will institutional resilience continue to support the cryptocurrency, or are further declines on the horizon?
