Crypto Market Stuck In “Extreme Fear” For Longest Stretch In Over A Year

There is blood running in the crypto market as top coins record losses across the board. Bitcoin and Ethereum are holding to critical support after an increase in selling pressure sent them below their weekly open.

At the time of writing, BTC trades at $32,867 with a 3.2% loss in the weekly chart. ETH trades at $1,996 with a 10% correction for the same period. During the weekend, investors turn more hopeful and bullish, but the sentiment currently seems to be running in the opposite direction.

Data from Arcane Research indicates that the “Extreme Fear” measure by the Fear & Greed Index has remained unchanged in a 7-day period. As BTC, ETH, and the rest of the crypto market in a ranging and consolidation phase, the investors’ euphoria has “dampened”.

According to Jarvis Labs, the reasons to be bearish in the current market conditions outweigh the bullish ones. Using Bytetree Electrical value models, Jarvis Labs has determined that the current Bitcoin trades at a premium related to its cost. Meaning that there is currently pressure on BTC’s price.

In addition, one of the crypto market’s main components, Tether (USDT), has been “silent” in the past weeks. Jarvis Labs translates this lack of activity as low demand from investors. Thus, they concluded that liquidity is low suggesting disinterest in the market for cryptocurrencies.

This lack of buying pressure combines with an increase in BTC inflows to exchange platforms over the past day. As recorded by monitor Crypto Quant, over 5,000 BTC entered crypto exchange Gemini during this period.

The Grayscale Effect And Its Potential To Push Bitcoin Further Down

The former coincides with activity from a Whale that Jarvis Lab and his analyst Ben Lilly called “Pablo”. The investor usually moves funds before a big bearish event or when Bitcoin will continue to depreciate.

On July 19^th, digital asset manager Grayscale will unlock the shares of its Grayscale Bitcoin Trust (GBTC). Many are speculated on the possibility that this event will create more selling pressure on the market, but Jarvis Labs and Lilly remain neutral.

Trading at a discount means no incentive to reinvest in the trust. We mentioned it back in December, and it seems to be turning out to be the case here. This effect has created a lack of demand on spot since these investors are not repurchasing BTC. I’m neutral on unlocks at the moment.

Still, the coming days could see an increase in volatility. Additional data shared by Jarvis Labs points to further downside, but they highlighted that there have been no “freakishly” big spike in BTC net flows and a constant neutral to negative funding rates which have been bullish in the past.

The crypto market is highly correlated at the moment. Bitcoin holds the key, as its performance could impact other cryptocurrencies. A recovery in the first cryptocurrency by market cap could finally signal the return of the bulls to the scene.