Enthusiasm for Spot Bitcoin ETF Approval Quickly Fades, Impacting Price
The recent approval of spot Bitcoin ETFs had initially sparked excitement within the cryptocurrency market but quickly led to a decline in the price of Bitcoin. The Crypto Fear and Greed Index, which had reached lows during October 2023, returned to a “neutral” sentiment after the approval. As of the latest data, Bitcoin was trading at approximately $42,600, down from the $49,000 mark it had reached just last week.
The market experienced a significant amount of volatility in the weeks leading up to the approval of BTC spot ETFs. While the cryptocurrency had soared both before and after the news, reaching a high of $49,000, the gains have since evaporated, leading the price to fall back to the $42,600 range. Market analysts have highlighted two main issues behind this price fluctuation. Firstly, investors appeared to have “sold the news” by liquidating part of their holdings due to the rapid increase in price. Secondly, there remains uncertainty around how the newly launched Bitcoin ETFs will function, potentially leading to stagnation in money inflows.
The Crypto Fear and Greed Index, an indicator of market sentiment, experienced a dramatic change following the approval of the BTC Spot ETF. In October, the index had been at low levels, but it has since jumped to a neutral sentiment with a score of 52 out of 100. However, this marks a decrease from the peak that was reached before the SEC’s approval, when the index was at 76, indicating “extreme greed.” Additionally, Google searches for “Why is Bitcoin falling?” saw a 1,100% increase, signaling that investors are struggling to understand the reason behind Bitcoin’s decline.