The data shows that the cryptocurrency market has been observing an intense fear for two months now, leaving investors in a panic as Bitcoin crashes to $20K.
Crypto Fear and Greed Index Still Scores ‘Extreme Fear’
According to the latest weekly report from obscure researchNow, the cryptocurrency market has been facing an extreme fright for two months now, the longest streak in history.
The “Fear and Greed IndexIt is an indicator that measures the general sentiment among investors in the cryptocurrency market.
The scale uses a numerical scale that runs from zero to one hundred to represent this feeling. All values above fifty indicate that investors are currently greedy, while values below the threshold indicate a fearful market.
Edge values greater than 75 and less than 25 mean pregnant feelings”extreme greedand ‘extreme fear’ respectively.
Now, here is a chart showing the trend in the cryptocurrency fear and greed index over the past year:
Looks like the value of the indicator has been very low recently | Source: Arcane Research's The Weekly Update - Week 24, 2022
As you can see in the above chart, the cryptocurrency fear and greed index is currently at a value of 9, which indicates that the market is very scary.
These low sentiment values have persisted for two months now, making this the longest intense fear the market has ever seen.
These index values remained while the entire crypto sector went through a crash and a large portion of investors went into the red.
Historically, streaks of high fear were when coins like Bitcoin tended to make bottoms (and similarly, tops occurred during extreme greed).
For this reason, some analysts believe that a very scary market could provide new buying opportunities for cryptocurrencies.
A trading style that follows this idea is called “counter investing”. This famous quote from Warren Buffet sums up the philosophy: “Be afraid when others are greedy, and be greedy when others are afraid.”
If the historical trend is anything to go by, the current long run of intense fear could be when Bitcoin and other coins notice bottoms. And if so, this may be the time when the opposing investor thinks it’s an ideal buying point.
At the time of writing this report, BTC price It is floating around $20.4K, down 1% in the past seven days. Over the past month, the cryptocurrency has lost 30% of its value.
The chart below shows the currency price trend over the past five days.
The value of Bitcoin seems to have dropped down over the past day | Source: BTCUSD on TradingView
Featured image from Thought Catalog on Unsplash.com, charts from TradingView.com, Arcane Research