The crypto sentiment index has plunged to 21 points, marking its lowest level since February, amidst stagnating institutional inflows and a substantial decline in total market capitalization. The sharp drop in crypto sentiment signals heightened market fear, impacting investor behavior and posing challenges in maintaining bullish momentum under current global economic conditions.
Crypto Sentiment Index Plummets to 21 Points
The crypto sentiment index has plummeted to its lowest since February, signaling heightened market fear. The sentiment index has dropped to 21 points, reflecting investor risk aversion and a decrease in market activity.
Prominent cryptocurrencies like Bitcoin and Ethereum are central in this trend. Liquidity movements, particularly those involving Tether, have been noted. Institutional participation has slowed, evidenced by plateaued ETF inflows.
Crypto Market Cap Falls to $3.46 Trillion
The decline in sentiment coincides with a drop in crypto market capitalization to $3.46 trillion. This suggests a risk-off sentiment among investors, paralleling decreased institutional inflows and stagnant liquidity across DeFi platforms.
According to Santiment's analysis, periods of deep fear often precede market rallies. However, absent official statements from prominent figures, moderation teams on forums cite macroeconomic pressures as ongoing concerns.
Fear & Greed Index Signals Potential Reversal
Historically, low points in the Fear & Greed Index have marked potential market reversals. November's usual bullish trend for Bitcoin appears disrupted this year, with macro conditions proving challenging.
Experts from Kanalcoin suggest fear-induced conditions could lead to rebound opportunities, though external macro factors remain vital obstacles. Monitoring these drivers will be crucial in forecasting potential market recovery.
Santiment, Analytics Firm: "The crowd is showing major fear, but these conditions have historically led to quick turnarounds and FOMO spikes as soon as bullish momentum is detected."