Bitcoin's Year-End Price Momentum Sinks to Levels Not Seen Since October

The Crypto Fear & Greed Index, a crucial indicator that gauges market sentiment toward Bitcoin and crypto, has plummeted back to levels seen in October amid a significant downturn in the price of Bitcoin in the last days of 2024.

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Current Market Sentiment: A Score of 65

As per the latest update on December 30, the Crypto Fear & Greed Index has registered a score of 65. Although this still places it within "greed territory," it is noteworthy that this marks the lowest score since October 15. This drop is particularly concerning given the recent slump in Bitcoin’s price.

Bitcoin Price: A 13.7% Drop in 12 Days

According to CoinGecko, the current price of Bitcoin (BTC) stands at around $93,000. This represents a staggering 13.7% decline over the last 12 days, with traders warning of an impending "huge dump" amidst a widespread shift towards stablecoins.

The Rise and Fall of the Crypto Fear & Greed Index

For most of November and December, the Crypto Fear & Greed Index had consistently remained above 70. This upward trend was largely attributed to the election of President-elect Donald Trump in the United States, as well as the significant victories secured by pro-crypto politicians in the Senate and House of Representatives. The index peaked at a score of 94 on November 22.

Calculating Market Sentiment: A Complex Mix of Signals

The Crypto Fear & Greed Index is calculated based on several key indicators that influence traders’ and investors’ behavior, including:

Google Trends: This measures the level of interest in Bitcoin and crypto.
Surveys: Collecting data from various sources to gauge sentiment among market participants.
Market Momentum: Analyzing price movements and trends to understand market direction.
Market Dominance: Examining the share of trading volume held by different cryptocurrencies.
Social Media: Monitoring social media platforms for discussions and sentiments about Bitcoin and crypto.
Market Volatility: Tracking price fluctuations to gauge market stability.

Predictions from Analysts

Markus Thielen, analyst and head of research at 10x Research, shared his insights in a December 29 report. He noted that some analysts have predicted a "timed parabolic move leading up to the Trump inauguration," followed by a significant correction. However, Thielen has a different perspective, anticipating an increase in volatility soon.

Veteran trader Peter Brandt outlined a possible price pattern in a post on X (formerly Twitter) on December 28. He suggested that Bitcoin could be following a "Hump Slump Bump Dump Pump" sequence:

Initial Rise (Hump): A rapid increase in price.
Decline (Slump): A significant drop in price.
Recovery (Bump): A subsequent rise in price.
Further Drop (Dump): Another decline in price.
Rebound (Pump): The final upward movement.

CryptoQuant founder and CEO Ki Young Ju shared Brandt’s post, agreeing with the predicted pattern.

Bitcoin’s Performance Over the Last Decade

In a report published on December 13 by CoinGecko blockchain researcher Prem Reginald, it was revealed that Bitcoin has outperformed traditional assets by over 26,000% in the last decade. In 2024, Bitcoin recorded a staggering 129% return, while gold saw steady year-to-date returns of 32.2%. The S&P 500 had a 28.3% return.

Conclusion

The Crypto Fear & Greed Index’s drop to October levels amid the current downturn in Bitcoin’s price is a cause for concern. Market sentiment has shifted significantly, and traders are warning of an impending "huge dump" amidst a shift towards stablecoins. As the market continues to evolve, it will be crucial to monitor these indicators closely to gauge future trends.

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