The data shows that the Bitcoin market is in an extreme fear state since May 5th, which means this streak of low sentiment for over a month has continued.
Bitcoin Fear and Greed Index Points to Extremely Fearful Market
The latest Weekly Report from Arcane Research shows that the cryptocurrency market is experiencing its most extreme fear in a while since 2020’s COVID crash.
The “fear and greed index” is an indicator that tells us about the general investor sentiment in the Bitcoin and wider crypto market.
This sentiment is displayed using a numerical scale that ranges from 1 to 100. If the index has a value below 50, investors may be fearful.
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Conversely, investors who have values that exceed the threshold are likely to feel greedy.
Werte towards the extreme end of the scale of 25 to 75 signify extreme fear or extreme greed.
Here’s a chart showing the Bitcoin fear-and-greed index trend over the last year.
Source: Arcane Research's The Weekly Update - Week 22, 2022| Source: Arcane Research's The Weekly Update - Week 22, 2022
The above graph shows that the Bitcoin fear and anxiety index has a value currently of 15. This indicates that there is a general fear sentiment.
This metric has been low for over a month. Similar long streaks were last witnessed after the COVID collapse two years back. That was followed by 48 consecutive days of negative sentiment before it improved.
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Tops tend to form when there is extreme greed, while bottoms are more likely to form in extreme fear.
This is why some investors think the first period offers the best buying opportunity for Bitcoin. While the second could offer great selling points.
This idea of contrarian investing can be described as a type of trading. Warren Buffet’s famous quote encapsulates it best:
Fearful of others being greedy. Greedy when other people are afraid.
This philosophy may indicate that now is the right time to invest in Bitcoin, if it’s anything to go by.
At the moment, it’s unclear how long this streak of extreme fear will last. This streak of extreme fear could last as long, or even longer, depending on how sentiment changes.
BTC Prices
At the time of writing, Bitcoin’s price floats around $30.4k, down 3% in the past week.
It looks like BTC's value has risen to $30k. Source: BTCUSD at TradingView| Source: BTCUSD on TradingView
Featured image taken from Unsplash.com. Charts from TradngView.com. Arcane Research