Crypto market sentiment once again falls into ‘extreme fear’ Bitcoin price drops below $56,000. The recent plunge has shaken markets and raised concerns about the future direction of Bitcoin and other major cryptocurrencies.
BitMEX co-founder Arthur Hayes believes Bitcoin could fall further, predicting that the price will fall below $50,000 over the weekend.
Crypto Fear and Greed Index Shows Extreme Fear
On September 6, cryptocurrency Fear and Greed IndexThe index tracking market sentiment scored 22, indicating extreme fear among investors. This was a sharp drop from 29 the day before. The current score is the lowest since August 8when the index reached 20.
This shift to extreme panic indicates that investor uncertainty is increasing. Data shows that Bitcoin has been in a state of panic over the past month. This panic has been exacerbated by Bitcoin’s recent price drop, which has seen its value drop to $55,838.
The sharp drop led to a large number of liquidations. CT Market Pro data Shows over $29 billion liquidated The market then began to fall. Fortunately, Bitcoin began to gradually recover to $56,533 after hitting the bottom.
Meanwhile, former BitMEX boss Arthur Hayes Bring to X expressed his pessimism about Bitcoin. “BTC is heavy,” he said in the post, adding, “My target price is below $50k this weekend. I made a bold short trade.”
$BTC Heavy, my goal for this weekend is under $50k. I took a shameless short trade. Pray for my soul, because I am a degenerate.
— Arthur Hayes (@CryptoHayes) September 6, 2024
Hayes isn’t the only one who is bearish, with many traders bracing for further volatility.
US economic concerns exacerbate Bitcoin’s BTC woes
Concerns about the U.S. economy have exacerbated Bitcoin’s woes. US employment data falls short of expectationsThis has raised concerns about a slow economic recovery.
Many believe this could delay the Federal Reserve’s expected rate cut, which would Continued downward pressure on Bitcoin.
Bitcoin’s decline also affected other assets in the crypto market. Ethereum (ETH) fell 2.23%, Solana (SOL) fell 2.82%, and XRP fell 2.19%.
The price drop led to a large number of liquidations. According to CoinGlass datalosing more than $94 million in the past 24 hours. Data shows that long positions were the most affected, with Bitcoin long positions accounting for nearly 40% of the total liquidation amount. Ethereum, valued at $17.36 million, is second..
In addition, according to Latest blog posts from CryptoQuantBitcoin activity is losing momentum. The blog post noted that Bitcoin’s daily active addresses have fallen to 838,000, the lowest level so far in 2021. CryptoQuant said this could be a sign that the broader market is not interested in Bitcoin.
Despite Bitcoin’s recent decline, CryptoQuant believes this could bring A buying opportunity for some investors.
“For some investors, the decline in active addresses and price could be seen as an opportunity to buy Bitcoin in anticipation of future gains.” CryptoQuant said.
Furthermore, the post states that if investors view the price drop as a sign that Bitcoin is losing strength, it could lead to the formation of new price levels.
In addition, Checkmate describe The current trend of Bitcoin price is “swinging and consolidating”. According to analysts, “the volatility is getting bigger and lasting longer.”
While the future remains uncertain, investors are closely watching market sentiment and key economic indicators. Whether Bitcoin falls below $50,000 or rebounds, the next few days will be crucial for the market.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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