Since 2022, most crypto markets have spent their time in fear territory. Extreme fear has been a big part of the market’s activities.
Crypto Fear And Greed Index Continues To Point At “Extreme Fear”
Arcane Research has released its latest Weekly Report, stating that market fears have not changed for 178 consecutive days.
The “fear and greed index” is an indicator that tells us about the general sentiment among investors in the crypto sector.
This metric is based on a numerical scale from zero to 100. Any value above 50 indicates that investors feel greedy at the moment, while values below this threshold indicate a fearful market.
Values of more than 75 and less than 25 towards the ends of the range imply sentiments of “extreme greed” and “extreme fear,” respectively.
Below is a chart that illustrates the change in the cryptocurrency fear and greed index for the past one year.
The metric is still very valuable. Source: Arcane Research's The Weekly update - Week 38 in 2022| Source: Arcane Research's The Weekly Update - Week 38, 2022
The graph above shows that the index of crypto fear and greed has remained at an extremely low level in recent weeks.
The indicator’s current value is 20. It means that market sentiment at this moment is one of extreme fear.
Investors have now been afraid for 178 consecutive day, which is longest stretch since 2018 when the metric was first created.
The crypto market was actually extremely scared for a large portion of that time. Before the August relief rally that saw Bitcoin prices rise, there was a period of extreme fear in the crypto market.
In 2022 the indicator saw very little time in the greed zone. Extreme fear has taken over the market for much of the time, and when there hasn’t been bottom sentiment, there has still been fear looming around the investors’ minds.
The history of extreme fear has shown that Bitcoin and other cryptos have seen their bottoms when there was deep sentiment.
According to the report, while these are good strategies for accumulating over time, investors need to be mindful that fearful sentiments can continue much longer.
At the time of writing, Bitcoin’s price floats around $19k, down 1% in the past week.
It appears that the cryptocurrency's value has fallen since the spike a few days ago. Source: TradingView: BitcoinUSD| Source: BTCUSD on TradingView
Image from Natarajan sethuramalingam, Charts from TradingView.com and Arcane Research.