Decreasing Risk Appetite in the Bitcoin Market

Coin Engineer - Bitcoin has lost 13.7% of its value in the last 12 days, causing the fear and risk appetite index to reach its lowest level since October 15.

Risk appetite is decreasing As of December 30, the fear and risk appetite index, while still in the appetite zone at 65 points, has seen its lowest level since October 15. According to CoinGecko data, Bitcoin is currently trading at approximately $93,000 and has experienced a 13.7% decline in the past 12 days. This drop has prompted investors to turn to stablecoins, which are seen as stable assets, and has fueled expectations of a market downturn.

Market's past performance and sentiment Market sentiment was quite positive after Donald Trump won the presidential election in the U.S., and pro-crypto politicians secured significant positions in Congress during November and December. During this period, the fear and risk appetite index generally remained above 70, peaking at 94 points on November 22. This index is calculated based on various factors, including Google Trends, surveys, market momentum, market dominance, social media interactions, and volatility, providing an important indicator to measure investor behavior.

Bitcoin's long-term performance CoinGecko blockchain researcher Prem Reginald stated in a report dated December 13 that Bitcoin has been the best-performing asset over the last decade. According to Reginald, Bitcoin outperformed traditional assets by more than 26,000%. Specifically in 2024, Bitcoin became the top-gaining asset of the year with a return of 129%. Gold ranked second with a return of 32.2%, followed by the S&P 500 with 28.3%.

Bitcoin's recent performance highlights the cryptocurrency market's susceptibility to volatility once again. Investors are advised to exercise caution and be prepared for potential fluctuations.