The last couple of months have seen a rise in negative sentiment within the cryptocurrency market. After a crash of the crypto market, which saw major coins Ethereum and Bitcoin drop to record lows one year ago, this is a resounding alarm bell. It has resulted in some of the lowest scale readings that the Fear & Greed Index has put out in recent times and it looks like this is only just beginning as negative sentiment has now touched yearly lows.
Crypto Market Extreme Fear
As with all declining markets, investors’ sentiments have turned negative. Market indicators show investors fearful of investing in this space. This has been the case for a while but the recent readings provided by the Crypto Fear & Greed Index show that it is worse than expected.
Current index score is 10. This marks the lowest level it has seen in six months. This index dropped to 10 in January, when it was still recovering from December’s crash. The market experienced a long period of declines in the following weeks.
Related Reading| Perp Traders Remain Quiet As Bitcoin Struggles To Hold $30,000
Even during recoveries, the negative sentiment is still strong. While bitcoin’s price has risen to $30,000 at the moment, Ethereum is pushing for $2,000 and Bitcoin continues to rise above that mark. However, it has not caused any shift in investor sentiment. This indicates that investors are not as keen to follow the market’s movements as they used to, but rather keep an eye on where the market is heading.
Trending total crypto market $1.25 trillion| Source: Crypto Total Market Cap on TradingView.com
Are You Not Strong Enough to Recover?
It is encouraging to see the recovery taking place in the wee hours of Monday. But it remains to be seen if this recovery can last. The reason for this is that the bulls had more control than the bears and the market has been more susceptible to sudden falls.
Bitcoin continues trading below its 50-day moving mean despite recovery, according to market indicators. It remains a seller’s market with indicators like this especially given where the next support level lies for the digital asset.
Similar Reading: Ethereum Profitability Drops to 2-year Low as Price Corrections below $2,000| Ethereum Profitability Dumps To 2-Year Low As Price Corrects Below $2,000
BTC only has adequate support at $28,108. Any decline will cause the digital asset to lose its Sunday gains, and it could fall back down to levels pre-weekend. It also doesn’t help that indicators are pointing to sell on all angles.
The market will require a significant inflow of funds to sustain the current recovery trend. There are still many cryptocurrencies that can fall even at current levels. However, buyers need to increase their activities enough to stop a downward trend.
Featured image by Phemex. Chart by TradingView.com
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