The Fear & Greed Index for bitcoin (BTC) has sunk to its lowest level since the March 2020 crash.
Due to the onset of the coronavirus epidemic last year, the market crashed through March 12 and March 13, 2020. On those days, the Fear & Greed Index fell to 14 and 10, indicating “Extreme Fear.” The Index eventually bottomed out at 8 on March 17 and March 26.
Today, the Index stands at 11, based on recent losses in the market, particularly yesterday. Last year’s losses were bigger in terms of percentage, with bitcoin falling over 50%, from $8,000 to $3,800. However, the monetary amount of losses yesterday far exceeds last year, with bitcoin losing $70 billion in market value.
Crypto’s recent tumble
Bitcoin has been struggling recently, due to setbacks, including China banning banks from using crypto and tweets from Elon Musk.
On May 19, China banned financial institutions and payment companies from providing services related to cryptocurrency transactions. This precludes them offering clients services such as registration, trading, clearing, and settlement.
Chinese authorities cited cryptocurrencies volatility as “seriously infringing on the safety of people’s property and disrupting the normal economic and financial order.” This caused the already faltering crypto market to nosedive, with bitcoin falling to as low as $30,000.
However, it might have been able to absorb the shock of the news, were it not for previous comments from Elon Musk. Crypto’s recent woes began when the Tesla CEO announced that the company would no longer accept bitcoin as payment. Musk cited environmental concerns, saying crypto is a good idea, but “cannot come at great cost to the environment.”. This caused bitcoin to initially fall below its $50,000 support level.
Musk further exacerbated the situation days later, when a Twitter user speculated that Tesla would “dump the rest of their bitcoin holdings.” Musk implied that this could be the case by replying, “Indeed.” This triggered further losses for Bitcoin until Musk decided “to clarify speculation,” saying, “Tesla has not sold any bitcoin.”
The coin then settled around $45,000, until China’s news caused the latest drop. Bitcoin is currently trading just above $40,000.