The data shows that the crypto market nearly escaped extreme fear territory early in the week but sentiment has again plummeted over the past few days.
Crypto Fear And Greed Index Continues To Point At “Extreme Fear”
As per the latest weekly report from Arcane Research, the current streak of extreme fear, which happens to be the longest ever, couldn’t be broken this week.
The “fear and greed index” is an indicator that measures the general investor sentiment in the crypto market.
This sentiment is expressed using a numerical scale that ranges from zero to 100. Any index value greater than 50 imply greed. Those below this threshold indicate fear.
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Values of more than 75 and less than 25 towards each end of the range indicate sentiments of “extreme greed” and “extreme fear,” respectively.
Below is a chart depicting the change in the cryptocurrency fear and greed index during the past year.
The indicator's value seems to have fallen back after an increase. Source: Arcane Research Weekly Update Week 27, 2022| Source: Arcane Research's The Weekly Update - Week 27, 2022
The graph above shows that the value of crypto fear and greed was 16 on the day the report was published. Alternative.me says the current value is 18, slightly higher than it.
However, the values remain in the extrem fear zone, meaning that the record-breaking streak of lowest sentiment for the past 70 days is still valid.
During the past week, the indicator’s value did look to be catching some upwards momentum as it briefly climbed to 24 on the weekend, which is just at the edge of the extreme fear region.
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However, this improvement in the sentiment didn’t last too long and the index once again dropped back down, before the longest extreme fear run in the history of the crypto market could be broken.
However, this report points out that the index might be overstating fearfulness in light of current conditions. The fear and greed index’s value depends on two major factors, the volatility and the trading volume. Binance removing trading fees from its platform has certainly influenced these two metric’s values and hence the index as well.
Investors will need to be more positive and see price action in order to help the crypto market escape this period of extreme fear.
BTC price
At the time of writing, Bitcoin’s price floats around $19.7k, down 3% in the past week.
It seems like crypto's value has fallen in the past few days. Source: TradingView, BTCUSD.| Source: BTCUSD on TradingView
Pierre Borthiry, Charts on TradingView.com and Arcane Research. Featured Image