Over the past 12 days, Bitcoin has faced a sharp decline of 13.7%, driving the Crypto Fear & Greed Index to its lowest point since mid-October. As of December 30, the index recorded a score of 65, hovering in the greed zone, yet marking a notable decrease from earlier in the year. This sentiment shift accompanies Bitcoin’s dip to approximately $93,000, sparking concerns among traders of a potential significant sell-off as attention shifts towards stablecoins.
Throughout November and December, the index had consistently surpassed 70, peaking at 94 following the U.S. elections, which saw numerous pro-crypto candidates secure Senate and House positions for the next presidential term. Calculated based on various indicators such as market momentum, social media trends, and volatility, the index reflects a broader apprehension among investors and traders.
Analysts, including Markus Thielen of 10x Research, anticipate increased volatility, noting predictions of a sharp price movement surrounding the upcoming presidential inauguration. Veteran trader Peter Brandt has also suggested a potential “Hump Slump Bump Dump Pump” price pattern, indicating current market fluctuations and future recoverability phases.
Despite recent setbacks, Bitcoin continues to outperform traditional assets significantly over the past decade. A CoinGecko report highlights Bitcoin’s 129% returns for 2024, surpassing gold and the S&P 500. This reaffirms Bitcoin’s dominant position, although market sentiment remains cautious as the year concludes.
