Key Points
- Bitcoin’s price has been trading between $57,000-$58,000, despite a sell-off from the German government.
- The Bitcoin Fear and Greed Index has dropped into the “extreme fear” zone as Bitcoin struggles to surpass $60,000.
Despite a significant sell-off from the German government, Bitcoin’s price has remained relatively stable, trading within a narrow range of $57,000 to $58,000. However, the cryptocurrency ended Thursday’s trading session 0.88% lower after reaching new highs earlier in the day.
Bitcoin, which had been showing strong decoupling from US equities, saw this gap diminish during Thursday’s trading hours. At noon in New York, the Nasdaq had dropped by 1.8%, the S&P 500 by 0.9%, and Bitcoin by 0.6% to $57,500.
Bitcoin and the Equity Market
Joel Kruger, a market strategist at the LMAX Group, suggested that cryptocurrencies might face further declines if the equity market experiences a broader correction. He noted that while the correlation isn’t absolute, a sharp pullback in stocks could negatively impact cryptocurrencies.
The Fear and Greed Index
Amid the current selling pressure, the Bitcoin Fear and Greed Index has entered the “extreme fear” zone, a development that coincides with Bitcoin’s failure to break through the significant resistance of $60,000.
Crypto and forex trader Justin Bennett noted in a July 11 post that Bitcoin’s price had once again failed to surpass the $60,000 mark, indicating a possible decline in the coming days.
On Thursday, the US released the Consumer Price Index (CPI) numbers for June, with inflation showing signs of slowing down significantly. The CPI data dropped by 0.1% in May, putting the 12-month rate at 3%, the lowest monthly number in nearly three years.
Despite cooling inflation, both risk-ON assets – crypto and equity – moved downwards. According to on-chain data provider Santiment, this turned out to be a sell-the-news event.
