Investors in crypto and Bitcoin are more afraid now than ever since Black Thursday, March 2020.
Crypto Fear And Greed Index Now Has An Extreme Fear Value of “7”
The “fear and greed index” is an indicator that tells us about the general market sentiment among crypto investors right now.
This sentiment is represented by the metric using a numerical scale that ranges from zero to 100. The index’s values below 50 indicate that investors are afraid at the moment. Those above fifty signify they are greedy.
An indicator value of 75 or less and 25 respectively signify extreme greed or extreme fear.
Here’s a chart taken from Arcane Research’s weekly report yesterday. It shows how the trend of the cryptocurrency fear and greed index has changed over the last year.
The value of this metric seems to have fallen in recent days. Source: Arcane Research’s The Weekly Update Week 23, 2022| Source: Arcane Research's The Weekly Update - Week 23, 2022
As you can see in the above graph, the crypto fear and greed index has been in the “extreme fear” territory for a while now.
This streak of extreme fear has been going for 57 days straight, making it the longest such streak the indicator has seen.
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Additionally, the index was at its lowest point since March 2021 when it was published (which happened yesterday).
This sentiment was worse than that of the Black Thursday incident back in 1996 (which took place due to the COVID-19 epidemic).
The crypto fear and greed index is now at 7.
It seems like the cryptocurrency market is experiencing a crisis. Source: Alternative.me| Source: Alternative.me
In the past, coins like Bitcoin were at their lowest point in history. Extreme greed has been when they have formed.
This is why some investors see very low sentiment value as great buying opportunities. As Warren Buffet’s famous quote says, “be fearful when others are greedy, and greedy when others are fearful.”
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The report notes, however, that while buying has been profitable in such times before, catching a falling knife like now isn’t an easy task.
BTC price
At the time of writing, Bitcoin’s price floats around $21.1k, down 30% in the last seven days. In the last month, crypto lost 30%.
Below is a chart showing the change in coin price over the past five days.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Unsplash.com's featured image. Charts by TradingView.com. Arcane Research: