Bitcoin (BTC) Sentiment Switches to “Extreme Fear”

Bitcoin is fighting for the $10,000 level, on the tail of hawkish remarks by US Treasury Secretary Steven Mnuchin, bringing down optimism.

Bitcoin (BTC) is once again at a crossroads, with sentiment seen sinking to a level of “extreme fear”, a marker of the readiness to buy or sell, as well as the confidence that the price would go upward.

https://twitter.com/Crypto_MK2/status/1154057625010491397

The negative mood arrived just weeks after BTC was trading on “extreme greed”, and follows days of hawkish remarks on the side of US-based regulators. The sentiment sees BTC slide to July lows.

"As bitcoin has been pulling back from the recent highs, over the last week or so the number 8,500 keeps coming up in chat groups and social media as a level that people would be looking to buy bitcoin," noted eToro analyst Mati Greenspan in his most recent analysis.

The $8,500 price level shows a switch in sentiment, and an expectation BTC will lose the battle, at least in the short term.

Steven Mnuchin, US Treasury Secretary, recently reiterated his hawkish opinions of Bitcoin (BTC), sharing his latest statements on CNBC SquawkBox. His latest drive to break the potential for anonymity and the obscuring of funds also signals to potentially harsher regulations for digital assets. Mnuchin has warned that the US Treasury will not allow BTC to become the next “Swiss-numbered bank accounts”.

"I can assure you I will personally not be loaded up on bitcoin in 10 years," Mnuchin said in an interview. "I would bet even in five to six years I won’t even be talking about bitcoin as Treasury Secretary."

In the past, Mnuchin has expressed his doubts about the future of BTC, adding warnings about risks to personal finance, as well as a tool for laundering funds. Mnuchin believes the US dollar is also used for laundering, but there are mechanisms to uncover some of the fraud and catch the bad actors.

Bitcoin is, so far, free of any limitations in transactions between two parties. Blockchain analysis is possible, but used on an ad-hoc basis, either by law enforcement or by startups attempting blockchain tracking. Still, there is no way to freeze BTC funds or curb the free movement of coins.

"I want to be careful that anybody who’s using bitcoin — regardless of what the price is — is using it for proper purposes and not illicit purposes," Mnuchin said. "And there are billions of dollars of transactions going on in bitcoin and other cryptocurrencies for illicit purposes."

Mnuchin’s statements come at a time when Facebook’s Libra is generating more regulatory interest in digital assets, also affecting the reputation of BTC. The leading coin is also struggling to establish additional optimism, as the most recent rally failed to re-spark mainstream interest.

Currently, BTC prices are trying to cling to the $10,000 level and avoid dropping to a much lower valuation, reversing the year’s gains so far.

On Thursday, BTC traded at $10,0093.12, up around 4% in the past day, with pressure to drag the price to four-digit valuations again.