Sentiment in the Cryptocurrency Market Dips Into 'Extreme Fear” After BTC Drops Below $54K

The Crypto Fear & Greed Index, which serves as an aggregate for investor confidence and attitude towards the market, dropped to 22, signaling extreme fear.

The cryptocurrency market is displaying signs of pessimism as the price of Bitcoin ($BTC) has dropped to $53,500 in a downturn that has seen the market capitalization dip below the $2 trillion mark.

The Crypto Fear & Greed Index, which serves as an aggregate for investor confidence and attitude towards the market, dropped to 22, signaling extreme fear. The index saw a low around 6 when BTC dropped below $18,000 in 2022 after the collapse of popular cryptocurrency exchange FTX.

These anxieties stem from concerns about a potential September correction that could push Bitcoin below the psychologically important $50,000 level. Arthur Hayes, the former CEO of cryptocurrency derivatives trading platform BitMEX, recently stated his belief that a price drop below $50,000 could occur this weekend.

However, other analysts remain bullish on the cryptocurrency. Cryptocurrency analyst MetaShackle on TradingView recently shared analysis showing the cryptocurrency’s chart forming an “absolutely massive” cup and handle pattern that could lead to a massive price rise.

According to the analyst's post, there has “never been a formation like this in the history of crypto, and it’s sure to be an incredible run to levels that will shock the world.”

A cup and handle pattern occurs when the price of a security trends downward and recovers to form a “u” shape, before seeing another slight downward drift that forms the handle. It’s widely considered a bullish signal.

As CryptoGlobe reported since the middle of August a specific cohort of Bitcoin investors, those holdings onto the cryptocurrency for shorter periods of tie, have offloaded 642,366 BTC, valued at over $36.65 billion, onto the market.

Meanwhile, Morgan Stanley disclosed in a filing that it increased its Bitcoin exposure, revealing a 2.1% allocation to BlackRock's spot Bitcoin ETF, IBIT, in its Institutional Fund.

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