The sharp drop in the price of Bitcoin has led to a significant deterioration in sentiment among cryptocurrency traders.

The Crypto Fear and Greed Index, which reflects the overall emotional background of the crypto market, dropped to 43, the lowest level since last October.

The indicator has moved from the greed zone, where it was just a week ago, to the fear zone, signaling growing investor anxiety. Fear is indicated on the scale by a value from 26 to 46. At these levels, bearish sentiment is assumed to prevail.

Continued capital outflows from U.S. spot ETFs are weighing on the market. The net outflow of funds from the spot Bitcoin ETF for May 1 amounted to a record $564 million — the highest amount since the products launched in January.

However, Santiment analysts remain optimistic about the future of BTC’s price. Experts noted that the market correction was predictable, given the growth in Bitcoin capitalization before the halving. Following the halving at the end of April, investors were buying on rumors and selling on news.

According to analysts, growth in the Bitcoin market in October 2023 and early spring 2024 was caused by high expectations from the halving. However, those who bought BTC at the end of March, when the price was at its all-time high, have been left at a loss.

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Author: Anna Kharton

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