The crypto market is experiencing extreme fear since two months, leaving investors panicking as Bitcoin crashes to $20k.
Crypto Fear And Greed Index Is Still Pointing To “Extreme Fear”
The latest Weekly Report from Arcane Research shows that the cryptocurrency market has been in extreme fear since two months ago, the longest period of time recorded.
The “fear and greed index” is an indicator that measures the general sentiment among investors in the crypto market.
For this purpose, the metric employs a numeric scale from zero through 100. Values greater than 50 indicate that investors are greedy, and values below fifty signify fear in the market.
Edge values of above 75 and below 25 mean holder sentiments of “extreme greed” and “extreme fear,” respectively.
Here’s a chart showing the trends in crypto fear and greed over the last year.
The indicator seems to have a very low value recently. Source: Arcane Research Weekly Update Week 24, 2022| Source: Arcane Research's The Weekly Update - Week 24, 2022
The above graph shows that crypto fear and greed index currently has 9 meaning the market is very fearful.
These low sentiment levels have been in place for more than two months, making it the longest period of extreme fear the market has ever witnessed.
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These indicators values have held steady despite the crash of crypto-related stocks and large investors who have fallen into red.
Coins like Bitcoin tend to form bottoms, and similarly tops can occur during extreme greed.
Some analysts think that an extremely fearful crypto market may provide opportunities to buy new cryptocurrency investments.
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The trading technique that follows this idea is called “contrarian investing.” This famous quote from Warren Buffet encapsulates the philosophy: “be fearful when others are greedy, and greedy when others are fearful.”
If history is any indication, Bitcoin and the other coins may see bottoms over the next long period of fear. If so, this could be the time when contrarian investors will consider it to be a good buying opportunity.
Bitcoin Prices
At the time of writing, BTC’s price floats around $20.4k, down 1% in the last seven days. The crypto’s value has dropped 30% over the last month.
Below is a chart showing the change in coin price over the past five days.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Featured image taken from Thought Catalog at Unsplash.com. Charts from TradingView.com and Arcane Research.
