Market analyst concerns over a correction below $50,000 are mounting, as crypto market sentiment returns to early August lows.
Crypto market sentiment has dropped to an over one-month low, as analysts warn of a potential Bitcoin (BTC) price correction below $50,000 as soon as this weekend.
The Crypto Fear & Greed Index, a multifactorial measure of crypto market sentiment, fell to a one-month low of 22, last seen at the beginning of August.
Fear & Greed Index. Source: alternative.me
The Crypto Fear and Greed Index has returned to levels not seen since the peak crypto market rally of November 2021.
Bitcoin (BTC) market sentiment has returned to levels not seen since its price reached $69,000 in mid-November 2021, according to the Crypto Fear & Greed Index.
The index is now at 72 out of a total possible score of 100, placing it within the “greed” ranking — a six-point increase from Oct. 24 and a 16-point bounce from its 50-point “neutral” rank on Oct. 18.
The strengthening market sentiment follows a wave of excitement that BlackRock’s spot Bitcoin exchange-traded fund (ETF) could be inching toward approval by the United States Securities and Exchange Commission.
On Oct. 24, Bitcoin staged its largest single-day rally in over a year, recording a 14% daily gain as its price briefly moved above the $35,000 mark.
The index gathers and weighs data from six market key performance indicators — volatility (25%), market momentum and volume (25%), social media (15%), surveys (15%) Bitcoin’s dominance (10%) and trends (10%) — to score market sentiment each day.
Nov. 14, 2021, was the last time the index reached a score of 72, just four days after BTC notched its all-time high of $69,044 on Nov. 10, 2021, according to CoinGecko data.
Related: BlackRock’s spot Bitcoin ETF now listed on Nasdaq trade clearing firm — Bloomberg analyst
The index recorded its lowest-ever score of 7 on June 16, 2022, after the collapse of Do Kwon’s Terra Money ecosystem.
The fallout from the Terra collapse triggered a cascade of price-dampening effects which later claimed hedge fund Three Arrows Capital and crypto lender Voyager Digital as casualties, among others.
Following the wave of excitement for spot ETFs, crypto investment firm Galaxy Digital has predicted that the price of Bitcoin could increase by more than 74% in the first year following a successful approval.
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Additional reporting by Tom Mitchelhill.
