According to data, Bitcoin buyers have remained cautious as the fear of the market continues. However, the sentiment among Bitcoin investors has improved in recent months.
Bitcoin Fear and Greed Index points to a fearful sentiment
The latest Weekly Report from Arcane Research shows that the BTC Market Sentiment hit an all-time high of 34, last week. However, it now hovers just over extreme fear territory.
The “fear and greed” index is an indicator that measures the general sentiment among investors in the Bitcoin market.
For this purpose, the metric employs a numerical scale from zero to one hundred. Values above 50 indicate greed while values below this threshold signify fear.
Values towards the end of the range of above 75 and below 25 signify sentiments of “extreme greed” and “extreme fear,” respectively.
In the past, tops formed during times of extreme greed while bottoms occurred during times with more positive sentiments.
Because of this fact, some traders believe it’s best to sell while the market is extremely greedy and buy when investors are extremely fearful.
“Contrarian investing” is a trading technique that echoes this idea. The famous Warren Buffet quote sums it up: “be fearful when others are greedy, and greedy when others are fearful.”
Below is a chart that illustrates the Bitcoin Fear and Greed Index’s trend for the past one year.
The indicator appears to be gaining in value over recent weeks. Source: Arcane Research Weekly Update Week 29, 2022| Source: Arcane Research's The Weekly Update - Week 29, 2022
You can see that Bitcoin fear and greed have seen some recent growth and are currently at 26. It is clear that this fearful sentiment grips the market.
This latest mental improvement was preceded by a lengthy stretch of fearful behavior, which is the longest period of crypto history. This lasted for 7 days.
Last week, the indicator’s value had risen up to even 34 as the coin’s price saw a recovery rally. The investors’ sentiment changed as crypto fell again after the end of the cryptocurrency run.
According to the report, this suggests that crypto market participants believe that recent rallies are a hoax.
The sentiment overall is a significant improvement on the June extreme fear hell. However, buyers are still reluctant to buy.
BTC Prices
At the time of writing, Bitcoin’s price floats around $21.3k, down 10% in the last week. In the last month, crypto gained 2%.
Below is a chart showing the change in coin price over the past five days.
The crypto market has seen a decline in value over the last days. Source: BTCUSD at TradingView| Source: BTCUSD on TradingView
Featured Image from Kanchanara, Unsplash.com. Charts from TradingView.com. Arcane Research