The Crypto Fear and Greed Index — a tool that measures broader market sentiment towards Bitcoin and the broader crypto market — has dipped to a level of “fear” not witnessed since March 11 this year, when Circle’s USD coin (USDC $1.00) briefly lost its dollar-peg.
The stumble in market sentiment comes in the wake of the United States Securities and Exchange Commission (SEC) filing a lawsuit against Binance, its U.S. arm of operations and its CEO Changpeng Zhao.
The SEC pressed a total of 13 charges against the exchange and its affiliates for failing to register as a securities exchange and operating illegally in the United States.
The Bitcoin Fear and Greed Index. Source: Alternative.me.
The index works by aggregating a mixture of indicators to gauge market sentiment. It combines metrics including price volatility, momentum, trading volume with data from social media and Google trends to form an overall picture of investor’s emotions towards Bitcoin and the wider crypto market.
Much of the negative sentiment owes to the immediate plunge in the value of cryptocurrencies following the SEC’s latest move against Binance. Blue-chip crypto assets such as Bitcoin and Ethereum (ETH $1,817) are down 4.1% and 3.1% respectively in the last 24 hours according to data from Cointelegraph Price Index.
The larger altcoins also took a beating. At the time of publication, Cardano (ADA $0.351) is down 6.4% in the last 24 hours while Solana (SOL $20) has fallen 7.4%.
Traders with open positions on crypto derivatives markets also suffered consequences, with more than $280 million worth of liquidations occurring since the announcement of the lawsuit.
Total liquidations in the past 12 hours. Source: Coinglass.
Unsurprisingly, traders with open “long” positions — a leveraged bet on the price of crypto assets increasing — were the hardest hit, accounting for $261.75 million (92%) of the overall liquidations. Meanwhile, short traders experienced $20.7 million in liquidations. The top two digital assets were responsible for around 43% of these losses.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.
Recommended Content
Editors’ Picks
XRP ruling by Judge Torres denied in Coinbase lawsuit, yet another blow to Ripple
XRP programmatic sales ruling by Judge Torres completely rejected by US Court in Coinbase lawsuit. US Court rejected Coinbase’ motion to dismiss SEC lawsuit, weighing heavily on Ripple’s legal battle.
Sushi price eyes $3 after clearing key weekly resistance level
Sushi price flips the $1.628 resistance level into a support floor after a month of struggle. A temporary retracement might be a good opportunity to accumulate SUSHI before a retest of $3. A breakdown of the $1.267 barrier would invalidate the bullish thesis.
Bitcoin Price Outlook: Will $150 billion bank Morgan Stanley send BTC to new ATH?
Bitcoin has recorded increased volatility this week, with most of BTC holders currently in profit. As market activity continues to grow with long-term holders now ramping up on distribution pressure, the pioneer crypto is bearing the brunt of growing overhead pressure.
Coinbase loses first round of battle against SEC
A day after the SEC filed a lawsuit against Binance last year, it went after Coinbase in a sign that the clampdown is extending to key players in the industry. The latest development in the matter is that the court has ruled in favor of the financial regulator, which means the case will continue.
Bitcoin: BTC may have recovered, but is it out of the woods?
Bitcoin’s (BTC) upward momentum has shown a significant decline for the past two weeks or so. This development led to a bearish signal on the weekly and an uncertain outlook on the monthly.