The Crypto Fear and Greed index saw its biggest one-day decline in years, hitting an 18-month low.

The Crypto Fear and Greed Index, which measures market sentiment for Bitcoin and the broader cryptocurrency industry, hit its lowest point in 18 months.

This growth followed Bitcoin's dip below $60,000, reaching its lowest level since early May.

Crypto Fear and Greed Index Plummets

The index fell by 21 points on June 24 and entered the “fear” zone by 30 points. At 74 just a week ago.

Bitcoin also experienced a dramatic price drop of more than 4 percent in the past 24 hours, hitting a seven-week low. The cryptocurrency hit a low of around $58,400 on June 24 before recovering. According to CoinGecko data, Bitcoin is trading at $61,115 at the time of writing.

Several factors have contributed to this rise in fear. Over the past 10 trading days, funds traded on the Bitcoin exchange have seen a massive inflow of more than $1 billion. Additionally, reports that the bankrupt MT Gox exchange may be preparing to liquidate $8.5 billion in BTC to creditors have added to the uncertainty.

On June 24th, the Met Gox Recovery Trustee announced that payment of approximately 127,000 creditors in BTC and BCH would begin in July 2024. He started selling some of his bitcoin stock.

Experts point to an overreaction of the market

Despite these developments, some experts believe the market's reaction may have been overblown. Samson Mow, CEO of Galaxy Digital, referring to the situation on X, confirmed to the market that there is no significant waste from Germany or Gox. He emphasized that Bitcoin dips are driven by emotion and fear, not by selling large holdings.

Most people seem to assume that when news of a big sell-off comes out, it's a market sell-off because they're probably selling/buying the market themselves. However, we know that large entities are very good at not moving the market. Look at the volatility of ETF flows from a few weeks ago;…

— Samson Mow (@Excellion) June 24, 2024

Mow also noted that the majority tends to assume that news of large-cap sales indicates a market sell-off because they themselves are either selling or buying. But he pointed out that large entities are adept at not moving the market. A few weeks ago the ETF's inflow imbalance, where demand was 27 times supply, but prices remained largely flat.

The Crypto Fear and Greed Index takes into account various factors including market volatility (25%), trading volume (25%), Bitcoin dominance (10%) and trends (10%). Since reaching the high point of 90 in the “extremely greedy” zone on March 5, when BTC reached a high of $69,000, the indicator is in a downward trend.