Bitcoin’s landscape sees extreme fear again after the latest retracement, which data suggests whales are behind the downside spiral.
The Fear & Greed index plummeted into the extreme fear region as Bitcoin declined. Moreover, the metric never explored such poor conditions since late January, when the bellwether crypto plummeted to $33,000.
Fear in Front Seat
Bears have controlled the cryptocurrency spectrum since the final sessions of March. Bitcoin hovered near the $50,000 mark (at that time) but could not touch the level amid gradual value drops. April sessions saw the world’s largest crypto dropping over $10,000, closing the month beneath the sought-after $40,000.
May hasn’t proved different so far. Bitcoin climbed towards the $40,000 level after the recent FOMC conference when Fed revealed an increasing rate by 50bp and not 75, but the rally didn’t persist, and the crypto resorted to declines.
The following sessions saw BTC plunging beneath $36,000, and the condition worsened over the past 24 hours as the crypto slumped to the lowest levels since January, exploring the $34,000 value region.
As somewhat expected, the violence plummets changed the overall sentiment of the marketplace, as BTC Fear & Green Index highlights. By evaluating multiple facets, including social media posts by the community, volatility, trading volume, and survey, this metric tells the overall feelings toward the crypto. The Index runs between extreme fear (0) and extreme greed (100).
The indicator stayed in the fear region since mid-April, before the latest price slump pushed it to the extreme fear territory. Reading at 18, the Index explores its lowest point since the mentioned late-January crash.
Whales Driving the Downside?
While all scenarios see retail investors emotionally disposing assets amid sell-offs, data from CryptoQuant reveals a different tale amid a recent crash. The latest research shows whales and large holders sending 10 – 10,000 BTC to crypto exchanges higher than retailers depositing between 0.01BTC and 10 BTC.
Thus, CryptoQuant believes whales might have an open position on stocks, and booking profits in cryptocurrency might translate to trimming risky assets to execute the stocks’ trades.
Feel free to leave a comment in the section below.