Bitcoin Drops To 113,000 USD, Fear & Greed Index Shifts To "Fear"

Data shows that the Fear and Greed Index of Bitcoin has changed in a downward direction after the price of this cryptocurrency fell to 113,000 dollars. Bitcoin Continues Recent Fall Since setting a new all-time high of (ATH) above $124,000 a week ago, Bitcoin has faced a downward trend. The bearish momentum has only continued to increase over the past day, with BTC hitting a low of below $113,000. Below is a chart showing the recent performance of this coin.

From the chart, it can be seen that BTC has recovered slightly after forming a low around 112,400 dollars, but at the current price of 113,800 dollars, this asset is still significantly lower than the levels of a few days ago. As usual, the falling price trend has worsened the sentiment of investors. The Fear and Greed Index Currently Indicates a Market That Is Fearful The "Fear & Greed Index" is an indicator created by Alternative, which informs us about the average sentiment present among traders in the Bitcoin and cryptocurrency market in general. This index determines investor sentiment by using data from five factors: trading volume, market capitalization dominance, volatility, sentiment on social media, and Google Trends. The index is then represented as a score ranging from 0 to 100. When this index has a value greater than 53, it means that investors in general share a greedy mentality. On the other hand, this index below 47 implies the presence of fear in the market. The level between these two thresholds naturally corresponds to a neutral net sentiment. Here is the current situation of this sector according to the Fear and Greed Index:

As shown above, the index is at 44, indicating that Bitcoin investors are fearful. This is a shift from the overall market sentiment in recent months. The Fear and Greed Index has previously been in the greed zone since June, but the recent drop in BTC means that investors have finally given up their optimistic sentiment.

If we look at history, this change in trading sentiment could really be a positive signal for Bitcoin and other cryptocurrencies. The market often tends to move in the opposite direction of the majority's expectations, with excessive FUD sentiment facilitating the formation of a bottom and excessive hype leading to a peak. This effect was witnessed during the lowest market sentiment period in June, as mentioned, coinciding with the time BTC hit a low of under $99,000. The reversal of this asset only requires an index value of 42, but overall, a stronger fear sentiment is needed before a bottom can appear. It is still unclear whether the latest drop in fear is enough to trigger a reversal for Bitcoin and other coins, or whether sentiment will continue to deteriorate.