The price of bitcoin and other cryptocurrencies continue to sink as investors continue to look for risk-free environments to keep their money as the pandemic virus, coronavirus takes a heavy toll on the global economy.
The largest cryptocurrency, Bitcoin slumped to $4,463 early Monday morning despite news that the US Federal Reserve has cut interest rates to zero. The cryptocurrency has declined by 57 percent from the $10,500 high it posted on 13 February.
A weekly summary of the cryptocurrency market by Luno describes the past one week as a historical one that saw nearly all altcoins affected negatively. While the market share of Bitcoin remained relatively stable at 63.38 percent, most cryptos dropped down more than 50 percent between March 12 and March 13, but have recovered some of the losses since then. Ethereum’s market capitalisation dropped -1.37 percent and Bitcoin Cash lost 0.12 percent.
In terms of price, both Ethereum and Bitcoin Cash lost 20 percent and 10.37 percent. XRP, the largest cryptocurrency also lost about 11.79 while Litecoin declined by 17 percent.
“The Fear & Greed Index dropped like a rock last week and is now down to 9,” said Marcus Swanepoel, CEO Luno. “This situation also shows that all indicators have their weaknesses. This index was down to a level of 5 in August 2019. As this index is built on very specific data (volumes, volatility, social media, surveys, dominance and google trends), it doesn’t necessarily get the real market sentiment. We can all agree that the market is more fearful now than in August 2019.”
Fear and Greed Index (FGI) measures investors’ emotions of fear and greed on a daily, weekly, monthly, and yearly basis. CNN looks at seven different factors to score investor sentiment on a scale of zero to 100—extreme fear to extreme greed respectively
In a note to investors on Monday, Adam Vettese, an analyst on eToro also explained that the double-digit drop in the cryptocurrency market was a result of investors dumping risk assets “without prejudice”.
Interestingly, Luno said there has been an uptake in the number of Bitcoins exchanging hands over the last week. Daily trading volumes, the company said, have risen to levels last seen in 2019. Last Thursday, 12 March, $4.2 billion changed hands.
The 7-day average real trading volume spiked last Friday, touching $1.5 billion – more than double the volume that was seen at the beginning of the week.
Despite the spike in trading volume, volatility rate in the market is at record levels. The 30-day volatility jumped up to above 8 percent – levels last seen since 2014 says Luno.
