(MENAFN- CoinXposure)
The bitcoin Fear and Greed index has reached 38, moving from neutral into the fear zone. The change occurred after the foremost digital currency lost approximately 11% in value during the previous week, causing the entire Cryptocurrency market to turn red.
Following fear is extreme fear, which may signal a purchasing opportunity because investors will be terrified.
Once Bitcoin enters the opposite zone of greed, it is possible that a price correction will occur.
In the final days of the previous week, the Bitcoin price dropped from just under $30,000 on Thursday to the $25,800 region, a loss of 11.18 percent.
On Friday, Bitcoin fell 8% in minutes after false reports that Elon Musk's SpaceX company was selling BTC worth $373 million.
Benjamin Cowen, a crypto analyst, believes that such massive drops below the bull market support bank (BMSB) are customary for Bitcoin as the halving date approaches.
According to Cowen, the next halving (or“halvening”) will occur in April–May 2024, and the price of bitcoin has fallen . The BTC price decline in August coincided with a 5% decline in the S&P 500 index.
The mining rewards for cryptocurrencies based on the proof-of-work consensus algorithm are reduced by half every four years.
If they currently earn 6.25 BTC (approximately $188,876) for each newly mined block, they will earn 3.125 BTC (roughly $94,438) after May 2024.
This year, two other PoW coins, Dash (DASH) and Litecoin (LTC), underwent a halving. Typically, halving a cryptocurrency's supply increases its scarcity, causing the price to rise.
See also coinbase receives $77.79m in btc from unknown sources 2 weeks ago
In April and October of 2021, Bitcoin reached two new all-time highs, with the second occurring near $69,000.
Many believe, however, that it was not the mining itself that occurred in 2020 that drove the price of BTC to a new all-time high.
Due to the pandemic in early 2020, the governments of the United States, United Kingdom, Europe, and Japan began printing money for corporate subsidies and population support during the quarantine period.
Over $6 trillion was printed for rescues and $1,200 for“survival checks” in the united states alone .
Since then, printing has persisted, and this year, after several central U.S. banks, including Silicon Valley Bank, failed, the U.S. government bailed out Silicon Valley Bank by printing more U.S. dollars for that purpose.