Crypto Market Drops Back Into ‘Extreme Fear’ As Prices Struggle
The crypto market has continued to struggle after running out of steam with its last rally. During the last lap of the year, the market as a whole is not doing too well, although prices of cryptocurrencies are way higher than they were this time last year. Nonetheless, there have been some interesting trends that have emerged with the market crash that has seen prices stagnate at this time.
The Fear & Greed Index has shown that market sentiment has gone into the extreme negative once again. With prices of top assets like bitcoin and ethereum trading below important support points, sentiment has fluctuated widely in the market but has mostly stayed in the negative. This time around, market sentiment has dropped low and landed in the ‘extreme fear’ territory.
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Crypto Market Basking In Fear
The crypto market has spent a good portion of the month of December in the fear territory. Market prices haven’t been the most favorable for the month and investors remain incredibly wary of getting into the market at such a time. Others have however seen this as a buying opportunity like in the case of MicroStrategy, which bought an additional 1,434 BTC bringing its total holdings to 122,480 BTC.
The aggregate for the month of November came out to neutral on the sentiment side of things after a tumultuous end to an otherwise wonderful beginning of the month. That has spilled into December as Christmas rolls around.
Market goes into extreme fear | Source: alternative.me
Yesterday the Fear & Greed Index had peaked at 29 on the chart, putting the market in the fear territory. This was up a bit from last week where the market spent long stretches in extreme fear. Today, market sentiment again rolled into the extreme fear territory with a low 23 on the chart.
The index being this low shows that there are low buying pressures in the market and high selling pressures. Sell-offs are still underway in various digital assets that have seen their prices dip into the red. As the market heads into the weekend which is usually characterized by low volatility, will the market be able to pull itself out of extreme greed?
Bitcoin, Ethereum Suffer Losses
Bitcoin had made a splash in the market when it had hit its new all-time high slightly above $69,000 at the beginning of November. This had sent the crypto market on what would be a memorable bull run as Ethereum came close to hitting the $5,000 mark not too long after. But this would only be short-lived as the downtrend had begun not too long after.
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For Bitcoin, the digital asset had lost as much as $10,000 in a single day that sent it towards the low $40,000s. Ethereum on the other hand had held out for a while but succumbed to the downtrend in time.
Bitcoin is now trading well below $50,000 after failing to hold above this price point this week. Ethereum is now trading below $4,000, a crucial support point for the digital asset. At the time of writing, bitcoin is trading at $47,141 and ethereum is trading at $3,826.
Crypto total market cap at $2.16 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Bitcoin News, chart from TradingView.com
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