The cryptocurrency markets are currently experiencing a heightened sense of excitement and apprehension, as investors grapple with the fear of missing out (FOMO) on potential profits. This emotion, commonly referred to as FOMO in crypto circles, can significantly impact market dynamics and lead to increased volatility and speculative trading activity. In this article, we delve deeper into the current state of the crypto markets, focusing on the shift towards extreme greed, record volumes in bitcoin ETFs, Coinbase’s service outage, and US government transactions involving seized bitcoin.
Crypto markets experience extreme greed
The crypto market has long been characterized by fluctuations in sentiment, ranging from fear to greed. Recently, there has been a noticeable shift towards extreme greed in the crypto market, indicating heightened investor optimism and a strong appetite for risk-taking. This sentiment is reflected in various metrics, including the Crypto Fear and Greed Index, which quantifies market psychology on a scale from fear to greed.
Positive news developments, such as the introduction of bitcoin exchange-traded funds (ETFs) in the United States, have contributed to this shift. However, extreme greed does not necessarily indicate an immediate sell signal; instead, it suggests a bullish sentiment that may lead to further price appreciation.
Record volumes in US bitcoin ETFs
Spot bitcoin ETFs in the United States have recently set new daily volume trading records. On February 28, these ETFs recorded $7.69 billion in total volume, surpassing their previous record by more than one and a half times.
BlackRock’s iShares bitcoin ETF (IBIT) accounted for 43.5% of the total volume, with $3.35 billion in trading activity. This was double its previous daily record. The ten ETFs had a combined 528,069 trades, surpassing the previous record by more than double.
The record volumes were later discovered to have contributed to the highest inflow day for US spot bitcoin ETFs.
Coinbase recovers from service outage
Major crypto exchange Coinbase recently experienced a technical problem that caused users to see zero balances on their accounts. The issue generated panic and uncertainty, with some believing there was a hack and that their funds had been stolen.
Coinbase later addressed the issue, explaining that user assets were safe and that the app’s outage was caused by a large surge in traffic. The exchange acknowledged issues with buying and selling and warned that increasing traffic might still cause errors for some users.
The most recent report, sent at 1:05 p.m. Pacific Standard Time (PST), stated, “We are starting to see Coinbase.com activity normalizing. We will continue to monitor our systems and provide updates.”
US gov’t transfers seized bitcoin
The US authorities recently transferred $922 million worth of bitcoin from two crypto wallets containing funds confiscated from Bitfinex in 2016. The first test transfer, valued at only one bitcoin ($60,200 at the time), took place on February 28.
us.googleusercontent.com/SwDplDUgXyReGUDHo-q7HxFOJw2sDcVkZCNo1Llr5_OweU6ltsppwl68DK6W4f60Au6ijnF1oWzLwsbLHq8olsxg_HZOO3WANDr5EzpQcLMM9m-10jniXSLTcECNq2lezG_rc9fnT5yd4r4nXIhyx5U” alt=”” title=””>The authorities seized the funds after Bitfinex was hacked for about 119,754 btc, which is worth more than $7.4 billion at current prices. The transfers took place a day after Ilya Lichtenstein, a hacker who stole and laundered over $4.5 billion in bitcoin from the Bitfinex exchange, appeared in a Washington court to explain how he carried out one of the world’s greatest bitcoin thefts.
According to Bloomberg, Lichtenstein reportedly told a jury on February 27 that he had access to Bitfinex’s servers for several months while also hacking individual accounts at other exchanges such as Coinbase and Kraken.
The current market condition, with heightened levels of FOMO (Fear of Missing Out), has resulted in significant volatility and speculative trading activity. The crypto market often experiences shifts in sentiment, ranging from fear to greed, which significantly influences investor behavior and market dynamics. Recently, there has been a noticeable shift towards extreme greed in the crypto market.
Extreme greed in the market does not necessarily indicate an immediate sell signal, instead, it suggests a bullish sentiment that may lead to further price appreciation. This shift is reflected in metrics such as the Crypto Fear and Greed Index, which quantifies market psychology on a scale from fear to greed.
Factors contributing to this shift may include positive news developments, such as the introduction of bitcoin exchange-traded funds (ETFs). Lately, spot ETFs in the United States have seen record volumes, with $7.69 billion in volume on February 28, according to data uploaded on X by Bloomberg ETF analyst James Seyffart.
BlackRock’s iShares bitcoin ETF (IBIT) accounted for 43.5% of the total volume, with $3.35 billion in trading activity, double its previous daily record.
The record volumes contributed to the highest inflow day for US spot bitcoin ETFs. The total number of trades was double too, over half a million individual trades between them.
Coinbase, a major crypto exchange, recently experienced a technical problem that caused users to see zero balances on their accounts. The issue generated panic and uncertainty, with some believing there was a hack and that their funds had been stolen. Coinbase later addressed the issue, explaining that user assets were safe and that the app’s outage was caused by a large surge in traffic.
US authorities transferred $922 million worth of bitcoin from two crypto wallets containing funds confiscated from Bitfinex in 2016. The transfers took place a day after Ilya Lichtenstein, a hacker who stole and laundered over $4.5 billion in bitcoin from the Bitfinex exchange, appeared in a Washington court to explain how he carried out one of the world’s greatest bitcoin thefts.
These recent developments underscore the extreme volatility and speculative nature of the crypto markets. Investors are advised to exercise caution and make informed decisions when investing in crypto assets.
Conclusion
The current market condition, driven by heightened levels of FOMO, has resulted in significant volatility and speculative trading activity in the crypto markets. This shift towards extreme greed is reflected in various market indicators, such as record volumes for US spot bitcoin ETFs and a surge in trading activity. However, it’s essential to exercise caution when investing in crypto assets due to the extreme volatility and speculative nature of the markets.
Additionally, major crypto exchanges like Coinbase have experienced technical issues that caused panic among users. Meanwhile, US authorities have transferred confiscated bitcoin worth $922 million from two crypto wallets.
Understanding the market dynamics and staying informed about the latest developments is crucial for investors looking to navigate the complex world of crypto trading. It’s also essential to remember that investing in crypto assets carries inherent risks, and past performance is not indicative of future results.
As the crypto markets continue to evolve, investors must remain vigilant and make informed decisions based on their risk tolerance and investment objectives.
