On June 6, the crypto market fear and greed index fell to 12 points. It had not dropped this low for several weeks. At the same time, bitcoin fell to $61,100, and sell-offs were observed across almost the entire cryptocurrency market.
Crypto market fear and greed index. Source: Alternative.me
The Alternative.me index measures market sentiment on a scale from 0 to 100 points. A value of 12 corresponds to the extreme fear zone. For comparison, the previous day the indicator was at 13, and a week ago it was around 52 points.
Amid worsening sentiment, bitcoin fell to its lowest intraday level since February. Market pressure intensified due to the ongoing outflow of capital from cryptocurrency investment funds.
Bitcoin price chart. Source: CoinGecko
According to JPMorgan analyst Kenneth Worthington, spot Bitcoin ETFs have now seen 13 consecutive days of net outflows. On Wednesday alone, investors withdrew nearly $400 million from the funds.
Since mid-May, a continuous series of sales has led to the total volume of funds in these ETFs shrinking by more than $4 billion.
Bitcoin, Ethereum and Major Altcoins Fell Simultaneously
At the beginning of June, bitcoin fell below $70,000 and then continued to fall to around $61,100, according to ChainCatcher and CFGI.io. The price approached the 200-week moving average, which is currently around $61,300. In previous market cycles, this level repeatedly served as a long-term support zone.
Ethereum was falling even faster than the market. The price dropped below $2,000, and at one point the coin was trading around $1,585. According to CFGI.io, the average sentiment over the past seven days was only 19 points. For comparison, the 30-day value held at 30 points, indicating a sharp deterioration in sentiment over a short period.
Almost the entire crypto market was under pressure. As of June 6, market pressure remained broad. BNB lost 3.9% in a day, XRP fell by 4.4%, Solana dropped by 6.4%. Of the major coins, Cardano fell the most, losing about 8% of its value and once again approaching levels the market had not seen in a long time.
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The sentiment picture looked no better. According to CFGI.io, bitcoin and Ethereum were in the extreme fear zone. Most other major cryptocurrencies also remained under pressure from negative expectations. Neutral sentiment persisted only in a small part of the market. Amid the sell-off, the total capitalization of crypto assets decreased by about $110 billion in a day, according to DEXTools.
Extreme Fear Does Not Always Mean a Reversal
The index has already dropped to similar levels during periods investors recall as some of the most difficult for the crypto market. This happened during the 2018 bear cycle, the pandemic crash, the Terra-LUNA crisis, and the 2024 sell-off.
Each time, market sentiment looked extremely depressed, but the bottom was not formed immediately. Low index values indicate the scale of panic rather than the imminent start of a new rally. After the Terra-LUNA crash, for example, the index showed extreme fear long before bitcoin reached the cycle’s lowest point.
Low index values indicate fear, but do not answer the question of whether the correction is over. Investors still prefer to act cautiously now.
The next indicator update will be released on June 7. Until then, the market will be watching two key factors: bitcoin’s behavior near $60,000 and the situation with ETF outflows. These are the factors that could set the tone for the coming weeks.
