The price of Bitcoin has been declining in value, causing the popular fear and greed index to once again, fall into the extreme fear territory. The current metric hasn’t been this bad since late January after the Bitcoin price was at $33000.
Fear Takes Over
Bitcoin has been bearish since the end of March. It was almost $50,000 at that time. Many crypto investors believed it would hit the expectation of $50,000 but BTC failed and began to gradually lose value. In April 2022 alone, bitcoin lost over 10,000 worth in value; it was below $40000 by the end of the month.
May started off with a low price value. It then jumped to $40000 after the last FOMC meeting where the Fed mentioned that bitcoin will raise interest rates by 50 basis points instead of 75. Though, this prediction was short-lived.
Soon after, the crypto coin ditched below $36000, and it even worsened in the last 72 hours, when it fell to its lowest price since late January 2022, around $31000. The drop in Bitcoin price seems to be expected, the violent dip has led to a shift in the overall market sentiments, exemplified by the Bitcoin Fear and Greed index.
[READ ALSO: Is Bitcoin Still Worth Investing in – In 2022]
Results from the crypto community on social media posts, polls, surveys, volatility, and trading volume, among others, determine general sentiment towards the crypto assets – meaning a lot of BTC holders are skeptical about holding but prefer selling off their coins.
The metric shows the end results from 0(extreme fear) to 100(extreme greed).
It has been fairly in the fear territory since mid-April, but the latest bitcoin price drops have pushed it into extreme fear. This is the lowest position it has been since the bitcoin drop in January 2022.
The Whales Behind the Sales?
While retail crypto investors are usually the BTC holders who react the most emotionally and sell off their bitcoins, data from CryptoQuant shows a slightly different narrative.
The most recent study from the analysis research shows the number of large players and whales selling between 10 and 10,000 BTC to crypto exchanges is greater than small investors selling between 0.01 to 10 BTC.
As such, CryptoQuant concluded that whales could have an “open position in the stock market and making profits in crypto could mean reducing risky assets to secure their stock positions.”