June 25th, the price of Bitcoin (BTC) fell below the psychological level of $60,000 for the first time since early May, and the crypto fear and greed index dropped to its lowest point in nearly 18 months.
The index measures the market sentiment for BTC and other parts of the cryptocurrency market, dropping 24 points on June 24th. This is the largest single-day drop in years, causing the index to fall to “fear” territory with a score of 30, the lowest in 18 months.
Since then, it has rebounded slightly to the current level of 46. A value of 0 indicates “extreme fear,” while a value of 100 indicates “extreme greed.”
The decline in the cryptocurrency fear and greed index coincides with BTC’s significant correction. On June 24th, BTC fell to a seven-week low of around $58,400. However, as of 2:40 am Eastern Time, the index rebounded slightly, trading at a price of $61,539.02.
Despite this increase, leading cryptocurrencies still have some ground to make up to erase their weekly losses. CoinMarketCap data shows that Bitcoin has fallen by over 6% in the past 7 days.
Several factors contributed to the selling pressure entering the BTC rankings. Over the past two weeks, Bitcoin spot ETF (Exchange Traded Fund) outflows have exceeded $1 billion.
At the same time, investors are preparing to liquidate $8.5 billion worth of BTC from the now-defunct Mt. Gox exchange.
More than a decade after its closure, the exchange’s rehabilitation trustee announced that BTC and BCH are set to begin repaying 127,000 Mt. Gox creditors in July.
BTC’s recent decline is part of a larger shakeout
While investors are concerned about how BTC will cope with the upcoming Mt. Gox sell-off, some analysts believe that BTC’s recent decline is part of a macro bullish trend.
Pseudonymous trader and analyst Rekt Capital stated in a post on June 25th, “Bitcoin’s pullback is to form a macro higher low.”
He added, “Bitcoin is likely forming a macro bull market at such price levels.”