As Bitcoin (BTC) experienced a second drop below the $40,000 mark within a week, the Fear and Greed Index recorded its lowest levels in the past 100 days. The index, which gauges market sentiment, moved into the neutral zone, indicating a decline in the interest of potential investors in the cryptocurrency space.
The Fear and Greed Index operates on a scale from 0 to 100, where 0 represents extreme fear and 100 signifies maximum greed. The current reading of 48 points places the index in the neutral zone with a prevailing sense of fear. This marks the lowest value since October 16 when the index was at 47.
The index had been in the “greed” zone, reflecting investors’ eagerness to purchase cryptocurrencies, since the beginning of November 2023. This heightened interest was primarily driven by the anticipation of the imminent launch of a Bitcoin exchange-traded fund (ETF).
However, with the recent launch of spot Bitcoin ETFs in the United States and Bitcoin’s descent below the $40,000 level, the Fear and Greed Index has dipped. This shift in investor sentiment suggests that the fervor surrounding Bitcoin ETFs has subsided.
Grayscale CEO Michael Sonnenshein has also expressed skepticism about the success of the 11 U.S. Securities and Exchange Commission (SEC)-approved spot Bitcoin ETFs. Sonnenshein believes that only “two or three exchange-traded funds will probably achieve some critical mass” in the market.
The decline in the Fear and Greed Index underscores the impact of recent market developments on investor sentiment, emphasizing the ongoing influence of external factors on the cryptocurrency landscape.
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