Tue. Jun 8th, 2021


Training Traders Since 2002

Bitcoin Plummets 30% as “Extreme Fear” Sets in on Crypto Markets

2 min read

The Crypto Fear and Greed Index, a metric that’s known to measure current market sentiment, fell to its lowest point of 2021. The index, which has continued to fall alongside Bitcoin prices, hit “extreme fear” levels, which have not been observed since April 2020 during the global financial market crash. 

Bitcoin (BTC/USD) prices dropped by more than 40% in March 2020 during the stock market crash. Since rallying more than 200% in 2021, the major cryptocurrency appears to be retracting similar levels. Source: Tradingview.com

The metric has continued to reflect the bearish sentiment that seems to have overtaken the crypto markets. As Bitcoin extended its losses and briefly hit $31,600 today, the indicator collapsed to a record-low rating of 11. 

News of Tesla rejecting Bitcoin payments earlier last week turned the markets sour — leading to a massive broad market drawdown. 

At time of writing, Bitcoin is down 27.63% in a single week, with Ethereum, Binance Coin and Dogecoin down 41.83%, 50.32%, and 26.60%, respectively. 

Just earlier last month, the metric signalled that the crypto market was heavily overheated, with a rating of 73, or “Greed.” Up to that point, Bitcoin was up by more than 200% YTD. 

Bitcoin Short Term Volatility Also at Record Levels 

Short-term volatility also climbed to the highest level seen since last February. According to the Bitcoin Volatility Index, monthly volatility rose to 4.64%. 

Unfortunately, it’s likely that volatility is here to stay. According to Deribit Metrics, historical volatility for the options market surged to 131%, up from 67% just a week prior. 

The contract with the highest notional value and volume are May 28 50,000 puts, which are already in-the-money. With more than $1.6 billion worth of contracts set to expire by the end of May, there’s no doubt that Bitcoin will continue to face choppy price action.

Featured image from UnSplash

Leave a Reply


API integration for DigiBot is complete. We launched on 10th September 2020.

DigiBot is available on TESTNET and MAINNET for ALL DigiBot owners. 

Please activate DigiBot by entering your TESTNET API key here & then update to your MAINNET API key when you wish to trade on MAINNET.

Lion Asset Management will issue no further BUY or SELL alerts for DGTX tokens and we are now NEUTRAL on Digitex Futures. We wish all DGTX holders, Adam and the team at Digitex Futures all the best for the future.