Bitcoin plunges, liquidating 3.9 trillion won in holdings; fear and greed index plummets to 9
Bitcoin plummeted nearly 10% in a single day, liquidating approximately 2.9 trillion won (approximately $2.7 billion) worth of leveraged positions. The "Fear and Greed Index," a gauge of cryptocurrency investor sentiment, fell to 9. This is the lowest level since June 2022, indicating extreme fear among market participants.
As of the 6th (local time), Bitcoin was trading above $65,000 (approximately 95.44 million won), down about 10% from the previous day. It once fell to the low $60,000 (approximately 88.1 million won) but has since recovered some of its losses. However, market experts warn that the risk of further declines has increased, as a significant portion of Bitcoin holdings are now in a loss-making zone.
Jerry O'Shea, head of global market strategy at Hashdex, explained, "Global investors are moving away from risky assets due to AI, geopolitical risks, and macroeconomic variables, and Bitcoin is no exception." He added, "In the short term, gold remains preferred, but regulatory clarity and increased adoption will further strengthen the narrative of Bitcoin as 'digital gold.'"
He continued, "Despite this recent plunge, Bitcoin will continue to gain traction as a non-governmental, immutable asset in the portfolios of asset managers. If progress is made, such as increased institutional participation, integration into traditional financial infrastructure, and increased regulatory clarity, the foundation will become more solid, even if price volatility persists."
In particular, he assessed that if the CLARITY Act, currently under discussion in the US Congress, is passed within the year, it could mark a turning point in market recovery. This bill is expected to have the effect of attracting institutional investors into the market by clarifying regulatory standards for digital assets.
The Fear and Greed Index, currently at a reading of 9, reflects extreme investor sentiment and is historically considered a bottoming signal. However, given the massive liquidations and loss-cutting pressure on Bitcoin over the past 24 hours, the prevailing view is that it's premature to predict a sharp rebound in the short term. Investors are expected to maintain a cautious approach, closely monitoring complex factors such as regulatory, technological, and macroeconomic changes.
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TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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