Crypto market in 'extreme fear' as Arthur Hayes predicts Bitcoin drop

Crypto market sentiment has plunged back into “extreme fear” as Bitcoin (CRYPTO:BTC) briefly dipped below $56,000. 

BitMEX co-founder Arthur Hayes expects Bitcoin to fall further, potentially dropping by another 12% to under $50,000 over the weekend. 

The Crypto Fear & Greed Index, which gauges market sentiment with a score out of 100, fell to 22 on September 6, indicating "extreme fear." 

This marked a seven-point drop from the previous day's "fear" level and is the lowest score since the index hit 20 on August 8. 

It also marks the first return to "extreme fear" since August 12. 

Bitcoin's price has declined by 2.7% over the past 24 hours, reaching a low of $55,838 after falling from above $58,000. 

This price drop wiped out $29.7 billion from Bitcoin's market capitalization, according to Cointelegraph Markets Pro. 

As of now, Bitcoin has recovered slightly, trading at $56,533. 

Arthur Hayes, in a post on X, commented, “BTC is heavy. I’m gunning for sub $50k this weekend. I took a cheeky short.” 

Bitcoin's struggle to gain momentum comes amid concerns over the slowing U.S. economy. 

Recent US jobs data released on September 5 fell short of economist expectations, heightening fears of a Federal Reserve interest rate cut. 

Bitcoin's price decline has also dragged down other major cryptocurrencies. 

Ether (CRYPTO:ETH) fell by 2.23%, Solana (CRYPTO:SOL) dropped 2.82%, and XRP (CRYPTO:XRP) saw a 2.19% decline. 

The overall price drop led to $94.26 million in liquidations in the last 24 hours, mostly from long positions betting on price increases. 

Data from CoinGlass shows that Bitcoin and Ether long positions accounted for over half of these liquidations, with $36.71 million in Bitcoin long bets liquidated, representing nearly 40% of the total. 

Ether long bets accounted for $17.36 million. 

The broader market sentiment remains cautious as uncertainty looms over potential economic downturns and continued market volatility. 

At the time of reporting, the Bitcoin (BTC) price was $56,339.30.