The Bitcoin Fear and Greed Index has hit its lowest level since January 2023
The Crypto Fear and Greed Index, a metric tracking relative market sentiment, hit its lowest levels since January 2023 and fell to 27 on July 9, according to data from Glassnode.
For reference, January 2023 was just two months after the collapse of crypto exchange FTX. At the beginning of that month, the Crypto Fear and Greed Index stood at 26, and Bitcoin (BTC) was trading around $16,500. However, by the end of the month, Bitcoin experienced a price rally and was trading around $22,000, according to data from TradingView.
Germany, the pressure to sell Mount Gox brings fear of fuel
The current market shock, with the German government dumping its BTC holdings and MT Gox bailing out creditors, sent BTC prices plummeting from $63,000 at the end of June to $53,570 on July 5.
The German government is hoarding tens of thousands of bitcoins in multiple units. The latest update shows that an additional $276 million in Bitcoin has been transferred to the wallet. According to data from Arkham Intelligence, the German government still holds around 22,800 BTC.
As the now-defunct exchange began repaying nearly $9 billion to creditors, the Mt. Gox payment has also started. Of that amount, $8.2 billion is in Bitcoin, which could be sold by creditors, adding to further selling pressure and fears that Bitcoin will fall again.
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The other side of the story
Due to increased selling pressure from institutions, Bitcoin Exchange Reserve or Bitcoin volume on exchanges has been steadily declining since 2021 and is currently at multi-year lows, acting as a balance to the selling pressure.
The ratio of mineral supply and miners also indicate that the mineral reserves are depleted and at this time the selling pressure by the miners should be reduced.
Fund investors responded to Bitcoin's recent price decline by buying the dip, representing the strongest weekly performance for Bitcoin funds in a month.
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