The Crypto Fear & Greed Index, the widely used gauge of investor sentiment, has slumped back into negative territory.
The index currently shows 30 points out of 100 after the most recent update.
The largest cryptocurrency is currently trading at $59,234, according to data provided by crypto tracking website CoinGecko.
According to data provided by Coinglass, $320.86 million worth of crypto has been liquidated over the past 24 hours. Long positions account for the vast majority of these liquidations.
Was the market too bullish?
As noted by analytics platform Santiment, the latest retrace came after longs started “pouring in” on exchanges of the likes of dYdX.
In fact, such eagerness to long Bitcoin has not been seen since March, the month the largest cryptocurrency hit its current peak.
Godfrey BenjaminThe analysis platform attributes the latest price plunge to this over-exuberance.
Liquidations happened quickly due to traders being extremely greedy.
Sentiment has noted that market positions tend to be liquidated when funding rates get extreme in either direction.
This August has been rather volatile for Bitcoin. On Aug. 5, the leading cryptocurrency plunged to the $49,000 level during the global market crash that was triggered by Japanese equities. As reported by U.Today, the cryptocurrency plunged into "extreme fear" territory following that crash.
Bitcoin then regained the $60,000 level within days, with sentiment rapidly improving. Now, it seems like the ball is in the bears' court once again, and it is not immediately clear what triggered this sell-off.
Godfrey Benjamin
Denys Serhiichuk
Vladislav Sopov
Dan Burgin