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Bitcoin Reaches New All-Time Highs Before Retreating by 11%
- Bitcoin’s all-time high party was cut short after profit-taking investors slashed its price by 11% in a matter of hours.
- In better news, the Fear and Greed Index for the crypto market dropped from “Extreme Greed” to “Greed” in the blink of an eye.
- According to Santiment, activity around the “BuyTheDip” hashtag has reached its highest point since Jan 3, 2024.
It was a day of “oohs” and “ahhs” as Bitcoin finally succeeded in what it’d been threatening to do for months – set a new all-time high. After bursting through the $69K (nice AUD $106K) barrier, holders started to dream about all the Buggatis and tropical islands they could buy with their BTC bags. However, the celebrations were short-lived as investors began to take their profits, resulting in an 11% dip in just 24 hours.
Related: ‘Larger Than Gold’: Galaxy’s Mike Novogratz Predicts Trillions Flowing Into Bitcoin
Fear and Greed Index Falls as Market Resets
The Fear and Greed index is often quite a reliable indicator for the crypto market. A key reason for this is that, unlike many other metrics, the F&GI incorporates social media tags into its algorithmic analysis. As the crypto world is often spurned by hype – which can typically be measured through social media activity – this makes the index a useful tool for applying a macro lens to the current market cycle.
As the market has matured, the Fear and Greed Index has managed to spend longer durations in the “Extreme Greed” phase (90+), which generally indicates an impending correction.
As BTC ticked over its USD pairing all-time high, so too did the F&G reading into “Extreme Greed”. Yet, just like the new ATH, this figure dissipated quickly as the metric dropped by 15 points in just a matter of hours. For now, Alternative.me’s Fear and Greed Index is reading 75 points, which suggests “Greed”.
Although the sudden drop in Bitcoin’s price may seem like a poor outcome, many in the community who believed the markets were running too hot exhaled a sigh of relief. For one, the consolidation phase gives investors a chance to pick up BTC at a lower price than anticipated – with “BuyTheDip” hashtags at their highest point since the start of 2024.
Related: Spot Bitcoin ETFs Hit Record $10bn in Daily Trading Volume
But after months of impressive gains, it shouldn’t be a surprise that the market has to cool off, even if just for a moment. As everyone gets a chance to catch their breath, the world can prepare for the upcoming BTC halving and the effect it will have on the market.
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
