Firm grip of fear

In the past day, Bitcoin slightly bounced then staggered into a downward lurch while short-term sell pressure mounted and panicky vibes peaked.

A check of the Crypto Fear & Greed Index yesterday revealed trepidation levels rising to levels normally associated with mass freak outs, which often are accompanied by rebounds, albeit much bigger ones than the bump felt yesterday.

The largest crypto did ascend from $56,300 in the morning to as high as $58,500 in the afternoon. But buyers decaffeinated by evening.

As of today, at 7:44 a.m. (EST), BTC, like some painfully shy child, was being encouraged to come on, give $57K a try, but not at all keen to interact.

"A tradable local bottom" could be at hand, said CoinDesk, referring to a note from Lekker Capital, a digital asset fund manager, latching on to fear levels approaching a level seen earlier this summer when mere mention of the phrase "Mt. Gox distributions" could send a shiver down the market's spine.

Checking on some positive gainers (and there are only a handful), there's been a decent pop observed in the spot price of Sui (SUI). The 38th-largest digital asset has gained 6% in the past 24 hours. SUI is nearing 82 cents. Its all-time high of $2.17 came back in March.

Sui is a blockchain platform created by Mysten Labs, partnering with Google Cloud for data storage infrastructure and also AI capabilities. Grayscale, which offers a trust fund vehicle tracking the price of Sui, yesterday pushed out a research piece asserting that while competition within the smart contract platform space surely will remain fierce, Sui is the "best-positioned third-generation chain to capture share from Ethereum over time."

Two other crypto movers of note: No. 52 Injective (INJ) and No. 59 Helium (HNT).

The latter, HNT, native asset of a decentralized network for IoT devices, rose 9% in 24 hours to reach above $8, per CoinGecko. HNT sits +20% over the past two weeks. It last touched $10 back in mid-February.

INJ, meanwhile, gained 6% to reach $17. It's the native token of Injective, a layer-1 chain built for DeFi applications.

We did come across an item touting up an intriguing collaboration between Injective's real world asset (RWA) module and BlackRock's tokenized treasury-yield fund, considered a landmark DeFi-meets-TradFi vehicle, and which has already garnered $500 million in assets.

Spot BTC ETFs have become a spigot, turned on for six straight days, spewing outflows. Some $37 million fled these vehicles on Wednesday. On Tuesday, as BTC was nursing steep losses, the 11 U.S.-listed products surrendered a net $287 million. That was the largest one-day outflow since May 1, per Farside Investors. "Much of the initial enthusiasm surrounding Bitcoin ETFs has disappeared," CNBC said.

Ah, but perhaps not completely. Bitwise’s BITB yesterday actually saw net inflows of $9.5M.

BlackRock’s IBIT, the largest spot BTC ETF, meanwhile, was at zero, flow-wise, for the day. 

If the crypto fear barometer ever hits zero ... you know what, let's not think about it. Suffice to say, such a reading would represent "extreme fear."

A reading of 27 out of 100, like the one recorded yesterday? Deepening fear but not quite hair-on-fire territory.

The index was 29 at last check earlier today.

Short-term holders could use a nightlight to soothe anxiety caused by a bad dream, one from which they can't awake. It concerns being underwater on recent BTC investments, and this drowning sensation could potentially "trigger significant market volatility if they decide to cut their losses," Decrypt said.

Somewhat chilling is the idea that tomorrow's employment report could potentially indicate creeping joblessness, signaling (eek!) the early stage of recession. The path of monetary policy hangs in the balance. Traders are on the edge of their seats.

Said the New York Times, "It's tough to overstate how much hinges on Friday’s employment update."