Crypto Fear & Greed Index Hits January 2023 Lows

The Crypto Fear & Greed Index, which measures relative market sentiment, dropped to 27 on July 9, marking its lowest level since January 2023, according to Glassnode data.

In January 2023, two months after the collapse of the crypto exchange FTX, the Crypto Fear & Greed Index was at 26, and Bitcoin was trading around $16,500.

By the end of that month, Bitcoin's price rallied to around $22,000, as per TradingView data.

The current market panic stems from the German government's sale of its BTC holdings and Mt. Gox's repayments to creditors.

This has driven Bitcoin's price down from around $63,000 at the end of June to about $53,570 on July 5.

The German government has been offloading tens of thousands of Bitcoin in multiple batches.

The latest update indicates an additional $276 million in Bitcoin was moved to its selling wallet.

Arkham Intelligence reports that the German government still holds approximately 22,800 BTC.

Mt. Gox has begun repaying roughly $9 billion to creditors, with $8.2 billion of that amount in Bitcoin.

Creditors are likely to sell this Bitcoin, adding further selling pressure and raising fears of another Bitcoin price crash.

Despite the institutional selling pressures, the Bitcoin Exchange Reserve, which measures the amount of Bitcoin held on exchanges, has been steadily declining since 2021 and is now at a multiyear low, mitigating some of the selling pressure.

The Miner Supply Ratio and the Miners Position Index suggest that miner reserves are depleted, indicating minimal selling pressure from miners at this point.

Fund investors have responded to Bitcoin’s recent price decline by "buying the dip," resulting in the strongest weekly performance for Bitcoin funds in over a month.

Sources:

https://cointelegraph.com/news/bitcoin-fear-greed-index-lowest-january-2023

https://platform.arkhamintelligence.com/explorer/entity/germany

https://cryptoquant.com/asset/btc/chart/exchange-flows/exchange-reserve?exchange=all_exchange

https://cryptoquant.com/asset/btc/chart/flow-indicator/miner-supply-ratio?miner=all_miner