Following Bitcoin’s brief dip below $56,000, market sentiment in the cryptocurrency space plummeted into “extreme fear.” Analysts, including BitMEX founder Arthur Hayes, have pointed out that this could signal further declines in the market. On September 6, the Crypto Fear and Greed Index dropped to 22, indicating “extreme fear” on a scale of 0 to 100. This marked a significant decline from the previous day’s “fear” level of 29.
The Fear and Greed Index Hits Low Levels
The last time the index dropped this low was on August 8, when it reached 20. Additionally, this marks the first time since August 12 that the market has entered the “extreme fear” zone. The renewed concern coincided with Bitcoin’s 1.3% drop over the last 24 hours, falling to $56,400. This decline wiped $29.7 billion from Bitcoin’s market capitalization.
Analysts Predict Further Declines
Despite a slight recovery with Bitcoin trading at $56,533, Hayes remains pessimistic. In a post on X (formerly Twitter) on September 6, he wrote, “BTC is heavy,” adding, “I’m targeting below $50,000 this weekend. I prefer a fast cut.” Hayes predicts that Bitcoin will drop another 12% in the coming days, falling below $50,000.
U.S. Employment Data Fuels Uncertainty
This downturn came after U.S. employment data released on September 5 fell short of expectations, increasing uncertainty around the Federal Reserve’s future interest rate policies and triggering market insecurity.
Other Major Cryptocurrencies Also Decline
Alongside Bitcoin, other major cryptocurrencies also saw losses. Ethereum (ETH) dropped by 2.23%, Solana (SOL) by 2.82%, and XRP by 2.19%. In the past 24 hours, the market witnessed liquidations totaling $94.26 million, with over 40%—or $36.71 million—attributed to Bitcoin long positions. Ethereum long positions saw $17.36 million in liquidations.
Experts Anticipate Continued Volatility
As market sentiment continues to deteriorate, some experts foresee further declines for Bitcoin in the near future, with investors bracing for more volatility.
