The cryptocurrency market has continued to struggle after losing steam with its latest rally. During the last turn of the year, the market as a whole is not doing very well, although the prices of cryptocurrencies are much higher than at this time last year. Nonetheless, there have been some interesting trends that have emerged with the market crash that has caused prices to stagnate at the moment.
The Fear & Greed Index has shown that market sentiment has turned extremely negative again. With the prices of major assets such as bitcoin and ethereum trading below major support points, sentiment has fluctuated widely in the market, but mostly remained negative. This time around, market sentiment has tumbled and landed in 'extreme fear' territory.
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Cryptocurrency market basking in fear
The cryptocurrency market has spent a good chunk of December in fear territory. Market prices have not been the most favorable during the month and investors remain incredibly cautious about entering the market at that time. However, others have seen this as a buying opportunity, as in the case of MicroStrategy, which bought an additional 1,434 BTC, bringing its total holdings to 122,480 BTC.
The November aggregate turned out neutral on the sentiment side of things after a tumultuous end to an otherwise wonderful start to the month. That has been extended to December as Christmas progresses.
Market goes into extreme fear | Source: alternative.me
Yesterday, the Fear & Greed Index had peaked at 29 on the chart, putting the market in fear territory. This was slightly more than last week, where the market spent long periods in extreme fear. Today, market sentiment re-entered extreme fear territory with a low of 23 on the chart.
The low index shows that there are low buying pressures in the market and high selling pressures. Liquidations are still ongoing on several digital assets that have seen their prices drop in the red. As the market approaches the weekend that is generally characterized by low volatility, will the market be able to break out of extreme greed?
Bitcoin, Ethereum suffer losses
Bitcoin had caused a sensation in the market when it hit its new all-time high slightly above $ 69,000 in early November. This had sent the cryptocurrency market into what would be a memorable bull run, as Ethereum came close to hitting the $ 5,000 mark not long after. But this would only be short-lived as the downtrend had started not long after.
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For Bitcoin, the digital asset had lost as much as $ 10,000 in a single day, sending it toward the low $ 40,000. Ethereum, on the other hand, had been holding out for a while, but succumbed to the downtrend in time.
Bitcoin is now trading well below $ 50,000 after failing to stay above this price point this week. Ethereum is now trading below $ 4,000, a crucial support point for the digital asset. At the time of writing, bitcoin is trading at $ 47,141 and ethereum is trading at $ 3,826.
Crypto total market cap at $2.16 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Bitcoin News, chart from TradingView.com
