US Stock Market Plunge and Tightening Fears Weaken Crypto Investor Sentiment... 'Extreme Fear'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] As the cryptocurrency market enters a downturn, investor sentiment is also subdued.

According to cryptocurrency data provider Alternative on the 3rd, the Fear & Greed Index, which indicates investor sentiment, was recorded at 24 points (extreme fear), the same as the previous day.

Investor sentiment has remained at extreme fear since recording 27 points (fear) on the 18th of last month. Last month, it dropped to 20 points (extreme fear) on the 23rd, 27th, and 28th, and also showed 20 points on the 1st of this month. Alternative's Fear & Greed Index ranges from 0 to 100, where 0 indicates extreme fear and pessimism about investing, and closer to 100 indicates optimism.

With the U.S. stock market declining and concerns over tightening continuing, cryptocurrency investor sentiment has failed to recover. On the 30th of last month (local time), the Dow Jones Industrial Average fell 500.10 points (1.71%) from the previous close to 28,725.51. The S&P 500, centered on large-cap stocks, closed at 3,585.62, down 54.85 points (1.51%), and the tech-heavy Nasdaq closed at 15,750.62, down 161.89 points (1.01%). On a monthly basis, the Dow and S&P 500 fell by 8.8% and 9.3%, respectively. The Nasdaq dropped 10.5%.

Additionally, the Federal Reserve's third consecutive giant step (a 0.75 percentage point increase in the benchmark interest rate) on the 21st of last month also led to a decline in prices of cryptocurrencies such as Bitcoin. According to the global cryptocurrency market tracking site CoinMarketCap, the representative cryptocurrency Bitcoin showed a downward trend after reaching the $22,000 range on the 13th of last month and fell to the $18,000 range on the 21st. As of 12:50 PM on the day, it was recorded at $19,190 (approximately 27.65 million KRW), down 0.62% from the previous day.

The total market capitalization of cryptocurrencies has remained below $1 trillion since the 15th of last month. On the 22nd of last month, it dropped to around $892.3 billion, and as of 9 AM the previous day, it was estimated at $935.5 billion.