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Binance Conversion: Investor confidence in cryptocurrencies falls to the lowest recorded levels.$BNB
The conversion occurs at a time when overall market confidence remains deeply negative.
Confidence took another hit after Bitcoin's brief correction below $60,000 on February 5, dropping to five on Thursday, the lowest reading ever recorded, indicating extreme fear among investors, according to data from alternative.me.
The index is a multifactorial measure of market confidence in cryptocurrencies.
The top traders in the sector by profitability, known as "smart money," are also protecting themselves against a further decline in the cryptocurrency market.
According to the cryptocurrency intelligence platform Nansen, smart money traders held a net short position of $105 million in Bitcoin and were net short on most major cryptocurrencies; Avalanche (AVAX) was the only notable exception, recording a net long exposure of $10.5 million.
The Bitcoin correction also represented a significant loss of tokens equivalent to 16% of Bitcoin's market capitalization, marking the largest weakness observed in the markets since the implosion of the algorithmic stablecoin issuer Terra in May 2022, as Glassnode wrote in a post on Monday on X.
However, the silver lining of the correction is that the market structure shows the first signs of stabilization, according to Dessislava Ianeva, an analyst at the digital asset platform Nexo.$BTC
