Low Volatility Crypto Market Supplies Surprisingly Stable State Of Fear

Data suggests that the cryptocurrency market is in an extreme state of fear despite Bitcoin volatility being very low.

Crypto Fear And Greed Index Continues To Point At “Extreme Fear”

The latest Weekly Report from Arcane Research shows that investors in cryptocurrency have been extremely nervous since the end of August.

The “fear and greed index” is an indicator that tells us about the current sentiment among participants in the crypto market.

This metric uses a numerical scale from zero to 100 for the representation of sentiment. If a value is above 50, it indicates greed. Values below this threshold indicate fear.

At values towards either end of the range, that is those above 75 and below 25, occur mentalities of “extreme greed” and “extreme fear.”

Here is the chart showing the trends in crypto fear and greed over the past year.

Crypto Fear And Greed Index

The value of the metrics seems not to have changed much over recent days. Source: Arcane Research’s The Weekly Update Week 39, 2022| Source: Arcane Research's The Weekly Update - Week 39, 2022

You can see that the current value for the crypto fear-and-greed index is 20. That means the market seems extremely afraid.

This continuation is an extreme fear streak which began in late August and ended more than a month ago.

In the past, investors were more fearful during times when coins like Bitcoin are volatile than they have during periods of higher volatility. However, there have also been instances where low volatility has been associated with greed.

While there was a lot of fear, BTC’s price remained stable at $19k. Below is a graph that shows just how low volatility the coin has experienced in recent months.

Bitcoin Crypto Volatility

The Bitcoin volatility seems to have plummeted in the week that has just passed | Source: Arcane Research's The Weekly Update - Week 39, 2022

The report notes that the crypto market investors having such a rock-bottom sentiment while the BTC volatility has also been low suggests there is an innate fear among the participants that the worst of the bear market hasn’t passed over yet.

BTC price

At the time of writing, Bitcoin’s price floats around $20k, up 5% in the past week. The crypto’s value has increased by 1% over the past month.

The chart below shows how the cryptocurrency’s price has changed over the past 5 days.

Bitcoin Price Chart

Over the last few days, crypto's value seems to have risen. Source: BTCUSD on tradingView| Source: BTCUSD on TradingView
Rudi de Meyer, Charts on TradingView.com and Arcane Research. Featured Image

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