Crypto Investor Sentiment Turns Neutral As BTC Price Falls Below $57,000

The Bitcoin Fear and Greed Index shows that crypto investor sentiment has turned neutral following BTC’s drop below $57,000.

According to data from Alternative.me, the fear and greed index stands at 54 for the first time in three months, indicating that crypto investors are neither fearful nor greedy in current market conditions.

Investors have neutral sentiment

The last time investors had neutral sentiment was on January 28, 2024, when the price of BTC hovered around $42,000. At the time, BTC was recovering and the crypto market was buzzing with excitement over the launch of the many Bitcoin exchange-traded funds, which had been green-lighted by US authorities two weeks earlier.

However, the current conditions of this market sentiment are different. Bitcoin has fallen from an all-time high of $73,700 recorded in mid-March. After experiencing increased volatility in recent weeks, the cryptocurrency took a turn for the worse yesterday, which continued today.

The Fear and Greed Index determines market sentiment by analyzing various factors, including bitcoin dominance, social media, market momentum, trends, and volatility. On a scale of 0 to 100, 0 indicates extreme fear, 50 indicates neutrality, and 100 means extreme greed.

In recent weeks, investor sentiment has remained around greed, occasionally rising to extreme greed. Alternative.me revealed that sentiment was 67 yesterday and 72 last week, indicating that investors have been greedy. Market participants were even greedier last month, as seen in the index rising to 79, a number that signifies extreme greed.

It remains to be seen which direction the crypto market will take in the short term: towards fear or greed. Although another correction is possible, analysts expect prices to rise in the long term, as they have always seen after the Bitcoin halving.

Will BTC sink further?

Meanwhile, bitcoin’s latest slide saw it fall below crucial support levels, and the crypto market lost more than $200 billion. In roughly 36 hours, BTC has fallen more than 11% from $64,100 to $56,700, dragging down altcoins and the rest of the crypto market. At the time of writing, BTC was still in the red, but had recovered slightly and was trading at $57,200.

Analysts believe that BTC could fall further before resuming its rally because there have been deeper corrections in previous bull cycles.

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