The Crypto Fear and Greed Index has affected Bitcoin investors, as fears of a potential slump in the price of the asset seem to be crushing their confidence at an incredible rate.
The index, which is usually displayed as a score between 0 and 100, aims to show the change in sentiment among crypto investors on a daily basis by aggregating surveys, dominance, volatility, and other metrics that have to do with the price of the world’s most popular asset.
However, the latest readings show that sentiment is only a fraction more optimistic than that of December 2018 and January 2019, when the crypto market sunk to the depths of its bear run.
A positive correlation
It is worth noting that the sentiment concerning the market continued to grow steadily around June when the asset rose steadily over a 3-week period and hit a peak price of $13,900. At the time, many around the industry believed that the surge would continue, with some even going as far as positing that the asset’s price would be able to hit the highs that were recorded in the bull run of 2017.
Again and again https://t.co/3q1iVyk24X
— CZ Binance (@cz_binance) August 16, 2019
The index also echoed their sentiments, as it showed that confidence in the asset was at an all-time high of 95. However, things didn’t particularly pan out as many optimists would have hoped, as the asset has seen its price drop consistently over the past few weeks. With that drop in price has come a plunge in the confidence of investors as well.
Back in August, the index recorded its lowest point since it was established in February 2018, standing on a bare score of 5. The previous record was on February 6, when Bitcoin dropped almost 50 percent of its value and went from $11,570 to $5,870. At the time, the index stood at just 8.
With the asset currently trading at $8,290 (- 0.11 percent on the day), the index now reads 37.
Bakkt’s Poor Performance
No one particularly knows what could have caused the drop in Bitcoin’s price, especially in a period where adoption seems to be rather fine. However, what we can all seem to agree on is that this lackluster price isn’t doing anyone any favors.
Last week, cryptocurrency investment platform Bakkt launched its physically-delivered Bitcoin futures contracts, and while the products have gotten a lot of anticipation from insiders since it was announced, the reception that it eventually got wasn’t quite encouraging. Only 71 contracts were traded in the first 24 hours of the contracts’ launch, with the trading price settling at $9,875 per BTC.
Now, however, things are much worse. Data from the Intercontinental Exchange’s platform shows that only 1 contract is in play, and the last recorded price has slumped to $8,432.5 as well.
Regardless, everyone remains wildly optimistic that things turn around. Bakkt isn’t looking to close the contracts anytime soon, and analysts are hoping that long–term stability can return to the Bitcoin market.