Investor sentiment falls as crypto market loses $100 billion

Investor sentiment falls as crypto market loses $100 billion

The crypto market is now put under another challenge. Over the past day, Bitcoin prices have fallen by around $2,000, causing the cryptocurrency market to lose significant value. As it stands, the cryptocurrency market capitalization has dropped by more than $100 billion and is now dangerously close to falling below a trillion dollars again. This, as expected, affected market sentiment, causing more fear in the market.

The market turns to fear

The crypto market has seen some recovery with anticipation surrounding the Ethereum merger. But as the excitement wore off, the market began to see a drastic price correction. Bitcoin hit $25,000 at its peak this latest recovery cycle. However, he has since lost most of those gains.

With this, the mood of the crypto market recovered for a while after bitcoin started its rise. The Fear and Greed Index at its highest point is 42, the highest point in four months. That brought it as close to greed as it had ever been, but the market had other ideas.

The price of Bitcoin is back below $22,000, and market sentiment has fallen with it. On Thursday, he closed with a low score of 30, putting him firmly back in fear territory. The shift is reflected in the crypto market, which has fallen from $1.1 trillion to around $1 trillion at the time of writing.

Crypto market cap losses $100 billion | Source: Crypto Total Market Cap on TradingView.com

As fear has returned to the market, investors are more cautious when it comes to investing in the crypto market. Perp traders showed market fatigue last week, causing Bitcoin’s funding rate to fall below neutral. Now, the rest of the market is following suit.

Recovery in the crypto market?

Since the market is just starting to recover, it is likely that the correction is not over. Such corrections are expected when the market grows so much in such a short time. This helps prices adjust to values ​​that reflect their current market conditions.

This means that the price of bitcoin could still fall. For now, the bottom is speculated to be established at $17,600, so the bears will want to try to test the support at this point. Historical movement also supports such movements as it did with previous bear markets.

Besides, the weekend is already here, which is a period known for low liquidity. This means that bitcoin is likely to continue its downtrend over the weekend. If the price of Bitcoin falls below $21,000, then the crypto market will fall below $1 trillion.

Featured image from Coinmama, chart from TradingView.com

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