The BTC Fear and Greed Index, an indicator of overall sentiment towards bitcoin, fell to the “Fear” zone on June 13 and 14. The last time the index remained in this zone for two days. consecutively in the first half of March.
One possible reason behind the change of trend is the commotion that the US SEC has caused in the crypto market after filing lawsuits against Binance and Coinbase. Bitcoin hit a high above $27,000 last Monday, but the past week has experienced some volatile trading days and dropped to multi-month lows.
WHEN IS THE TIME TO BE ASKED BACK?
The legal battle the US SEC is waging against Binance and Coinbase has affected the entire crypto market, especially the alt-coins that the agency claims are unregistered securities.
Regulatory actions have also hurt the value of BTC, as it fell from $27,000 to below a multi-month low of under $25,400 after the two lawsuits were announced. While there has been some minor recovery, damage has been noted, at least based on Bitcoin’s Popular Fear and Greed Index.
The index entered the “Fear” zone on June 6 (the day the SEC filed the lawsuit against Coinbase and within 24 hours it was Binance), for the first time in nearly three months.
The indicator has shown a state of “Fear” or “Extreme Fear” for most of the year 2022, mainly due to the scandals and crashes that occurred. Some examples include the Terra crash, the bankruptcy of Three Arrows Capital, and the FTX crisis.
However, since the beginning of 2023, investors have begun to change sentiment towards bitcoin as the crypto market begins to show signs of recovery.
CAN THIS BE A GOOD BUYING OPPORTUNITY?
Contrary to some altcoins, the US SEC has not extended its crackdown on bitcoin (at least for now). This asset could turn out to be a big winner amid regulatory turmoil as investors can dump other digital currencies and focus on it.
This thesis is supported by MicroStrategy Executive Chairman Michael Saylor who believes that BTC market share dominance could reach 80%, while its price could surpass $250,000 if the trend remains the same. .
Recently released US CPI (Consumer Price Index) data also gives hope to investors that bitcoin valuation could start a new bull run. The CPI year-on-year increase of 4%, slightly lower than the 4.1% expected, means the Federal Reserve may stop raising its key interest rate.
see more : Michael Saylor thinks SEC crackdown could boost Bitcoin dominance by 80%