On Monday, the Fear and Greed Index — which is used to measure market sentiment — dropped to 70.
The decline is the largest since Donald Trump won last month.
This index ranges between 0 and 100, indicating extreme fear or greed, and guiding potential investors to buy or sell.
The market is transitioning away from recent highs, which were driven by greed. This dip reflects a greater awareness of risk as it moves further away.
Bitcoin falls as Bitcoin sentiment drops after Trump’s election
After Trump’s victory in the election, the index soared to 94. This reflected peak greed on Wall Street as investors drove Bitcoin towards its December highs.
The subsequent decline to 70 suggests a more measured strategy among traders.
The market’s 94 is often viewed as being overvalued. Unchecked optimism drives asset prices.
Investors are becoming more cautious, as 70 indicates.
Bitcoin’s trajectory reflects this change in sentiment.
The leading cryptocurrency, currently trading around $95,488, has fallen by more than 8% over the last week.
This chart shows how Bitcoin prices are often correlated with the Fear and Greed Index. Prices tend to rise when fear dominates, but they can fall sharply when greed takes over.
This latest drop also reveals a slight recalibration of investor expectations.
Market participants are ignoring warnings of overvaluation. This suggests a more balanced view compared with the earlier fervor.
Bitcoin volatility during the holiday season remains unpredictible
Bitcoin holiday performance is being scrutinized as the end of the year approaches.
The historical trends are not clear, as the Bitcoin has shown mixed behavior during past festive seasons.
In some years, prices have risen in January while in others they have declined.
A factor that is often mentioned during holidays can be the lower liquidity, which may amplify any price fluctuations.
Despite the lack of institutional participation, price stability has been achieved during some periods.
Bitcoin’s future could be influenced by external factors such as macroeconomics, Trump’s return to office, or the impact of the ETFs approved in 2024.
Bitcoin’s volatility is a key feature of the market.
The Fear and Greed Index is now signaling a change in sentiment. This could mean that the holiday season will be quieter unless there are unexpected events to re-ignite the market.
The post Crypto Fear & Greed Index Drops to Lowest Since Trump’s Election may be updated as new developments unfold.
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