Cryptocurrency market becomes fearful as Bitcoin shows weakness, falling below $40,000
According to Alternative.me’s Cryptocurrency Sentiment “Fear and Greed” indicator, the digital asset market has entered the state of “extreme fear”.
Bitcoin plunge causes panic
The main reason behind the strong change in the indicator’s value is caused by the most recent Bitcoin drop below $40,000, which was considered impossible amid the cryptocurrency market rally we saw in March.
As Bitcoin began to slowly lose much of its value, short-term traders began to actively dump their holdings, which created even more selling pressure on digital gold and caused panic in the market. cryptocurrency community.
Since the indicator includes social sentiment data, it affected the value shown by it greatly.
Long-term investors remain calm
According to data provided by IntoTheBlock, long-term investors remain calm and buy the dip as their holdings have increased by 2 million BTC in recent weeks. On the other hand, traders and short-term holders are actively exiting the market, waiting for a further drop in the medium term.
Alternative.me’s indicator includes data like volatility and market momentum, which allows it to reflect both social and technical data. According to the indicator’s official page, it measures the current volatility of Bitcoin and compares it with average values in the last 1-3 months. The rise in volatility plays out in favor of a fearful market.
In addition to average volatility, the developers measure trading volume and market dynamics. As buying volumes increase in trending markets, and vice versa, it is considered greedy whenever Bitcoin dips.
At press time, Bitcoin trades at $40,336 after bouncing from $39,187 in a matter of hours, which shows large buying volume concentrated around $39,000.
