The Fear of Corruption Index hit an 18-month low, but has a turning point appeared?

Original title: "Panic "lingers", BTC fear and greed index falls to 18-month low"

Original author: Mary Liu, BitPush

On Tuesday, Federal Reserve Chairman Powell's positive tone on the improved inflation outlook eased market tensions. After Powell's speech, traders bet on the probability of a rate cut in September, up to 73% from 68% last week, but remained cautious ahead of the release of this week's Consumer Price Index (CPI) and Producer Price Index (PPI) reports.

Bitpush data shows that the total market value of cryptocurrencies rose by 2.5%. The long and short forces of Bitcoin competed, and the long forces pushed BTC from $56,700 to an intraday high of $58,312. As of press time, the trading price of Bitcoin was $57,804, a 24-hour increase of 2.19%.

Most of the altcoin market rebounded, and about 90% of the top 200 tokens by market value rose.

Mog Coin (MOG) rose the most, about 18.1%, followed by Sei (SEI) up 17%, and Celestia (TIA) up 16.8%. aelf (ELF) fell the most, down 6%, Pepe (PEPE) fell 4.4%, and Axelar (AXL) fell 3.5%.

The current overall market value of cryptocurrencies is $2.12 trillion, and Bitcoin's market share is 53.7%.

At the close of U.S. stocks, the S&P 500 and Nasdaq 500 rose 0.07% and 0.14% respectively, while the Dow Jones fell 0.13%.

Bitcoin Fear & Greed Index Falls to Lowest Level Since January 2023

The BTC Fear & Greed Index, an indicator that tracks relative market sentiment, has fallen to its lowest level since January 2023, dropping to 27 on July 9, according to data from Glassnode.

Lower levels of the index indicate negative investor sentiment, while higher levels indicate a hot market with investors afraid of missing out on profit opportunities.

January 2023 was just two months after the crash of cryptocurrency exchange FTX. At the beginning of the month, the Crypto Fear & Greed Index was 26 and Bitcoin was trading at around $16,500. It then rebounded to around $22,000 by the end of the month.

Some analysts believe that the recent correction may be attributed to the panic caused by the German government's sale of more than $3 billion worth of previously seized Bitcoin and the return of Mt. Gox claims. Mt. Gox's Bitcoin repayment is close to $8 billion, although the timing remains uncertain and creditors may choose to hold rather than sell on the market. Meanwhile, as of July 9, more than 50% of the 50,000 Bitcoins in the German government's wallet have been transferred to exchanges.

Markus Thielen, founder of 10x Research, said in a market update on Tuesday that BTC's upward momentum may continue for a while, possibly reaching $60,000, but this rise will be short-lived and no tactical bullish counter-trend rebound is expected in the short term.

“We expect Bitcoin to potentially recover to nearly $60,000 before falling again to the low $50,000s, creating a mixed trading environment,” he added.

Seasonal trends also don’t help Bitcoin, with the third quarter historically showing the weakest returns, K 33 Research senior analyst Vetle Lunde noted on Tuesday.

Seasonal weakness combined with the German government’s sale of seized assets and the ongoing distribution of Mt. Gox refunds weighed on prices, he added. Those selling pressures are expected to weigh on the market in the coming months, with volatility expected to continue into October, according to K 33 Research estimates.

Signs of a turnaround

Amid the market’s decline, technical and fundamental analysts offer some ideas for what’s next.

According to CryptoQuant analyst Crypto Dan, the Bitcoin Puell Multiple "is usually suitable for finding the bottom of a bear market, but it can also predict the end of an adjustment period in a bull market."

He explained that the area circled in red in the above figure is a situation in which miners' profitability declines rapidly during the bull market cycle and the Puell Multiple indicator plummets. The indicator fell sharply during the bull market cycles in 2016 and 2020, and then Bitcoin began to rise strongly.

Crypto Dan said: "At present, similar movements have been found. Although it is difficult to determine the exact end time of the adjustment period, it can be expected that it will not be too far away. We are likely to see a resumption of the bull market in the third quarter of 2024."

After Bitcoin recently fell below $55,000, crypto market analyst Crypto General pointed out on the X platform that a "double bottom" pattern is forming and predicted a rebound to $64,000 in the short term. He believes that for Bitcoin to continue its rise, it needs to maintain support at the 4h 50 EMA, which is currently close to $58,000.

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