The Crypto Fear and Greed Index entered the "Extreme Fear" zone for the first time since July 2022.
This index, which measures crypto market sentiments, dropped to a score of 17 out of 100 on August 6—a sharp decline from its score of 67 just a week ago.
Such sentiments emerged one day after US spot Bitcoin exchange-traded funds (ETFs) saw outflows totaling $168.4 million.
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The Grayscale Bitcoin Trust (GBTC), ARK 21Shares Bitcoin ETF (ARKB), and Fidelity Wise Origin Bitcoin Fund (FBTC) were hit the hardest, with withdrawals of $69.1 million, $69 million, and $58 million, respectively, according to Farside Investors.
In contrast, some ETFs managed to attract new investments. The Grayscale Bitcoin Mini Trust (BTC) recorded an inflow of $21.8 million, while the VanEck Bitcoin Trust (HODL) and Bitwise Bitcoin ETF (BITB) saw inflows of $3 million and $2.9 million, respectively.
BlackRock's iShares Bitcoin Trust (IBIT), the Invesco Galaxy Bitcoin ETF (BTCO), and Franklin Templeton's Bitcoin ETF (EZBC) recorded no inflows or outflows.
While Bitcoin ETFs faced outflows, spot Ether ETFs recorded inflows totaling $48.8 million, per Farside data. BlackRock's iShares Ethereum Trust ETF (ETHA) led these inflows with $47.1 million, followed by the VanEck Ethereum ETF (ETHV) and the Fidelity Advantage Ether ETF (FETH), which garnered $16.6 million and $16.2 million, respectively.
August 5 saw significant price drops for various cryptocurrencies, with BTC falling to $50,000 for the first time since February and ETH decreasing by 22%. The broader crypto market lost over 17% of its total market capitalization this day, dropping from approximately $2.16 trillion to around $1.76 trillion.
Trillions of dollars were wiped out from the US stock market on the same day due to fears of an economic recession, weaker-than-expected employment statistics, and disappointing major tech stock performances.
Despite these challenges, some experts remain optimistic about Bitcoin's future. Tuur Demeester, a Bitcoin analyst, suggested that Bitcoin could fall below the $45,000 mark; however, he advised against making bearish bets, as the price can quickly rebound.
The value of Bitcoin has increased by 5% over the past day, climbing to $55,778 at the time of writing after hitting a low of $50,072 on August 5.
Overall, the cryptocurrency market is navigating through turbulent times, marked by extreme fear and significant outflows from Bitcoin ETFs.
In other news, Senator Cynthia Lummis recently presented a bill in the Senate to establish a strategic Bitcoin Reserve for the US.
