Data exhibits the crypto market has been observing excessive worry for 2 months now, leaving buyers in panic as Bitcoin has crashed to $20k.
Crypto Fear And Greed Index Is Still Pointing To “Extreme Fear”
As per the most recent weekly report from Arcane Research, the cryptocurrency market has now been dealing with excessive worry for 2 months now, the longest streak in historical past.
The “fear and greed index” is an indicator that measures the overall sentiment amongst buyers within the crypto market.
The metric makes use of a numeric scale that runs from zero to hundred for representing this sentiment. All values higher than fifty indicate that buyers are grasping in the mean time, whereas these beneath the edge signify a fearful market.
Edge values of above 75 and beneath 25 imply holder sentiments of “extreme greed” and “extreme fear,” respectively.
Now, right here is a chart that exhibits the development within the crypto worry and greed index over the previous 12 months:
Looks like the worth of the indicator has been very low just lately | Source: Arcane Research's The Weekly Update - Week 24, 2022
As you may see within the above graph, the crypto worry and greed index has a price of 9 proper now, suggesting that the market is extraordinarily fearful.
Such low sentiment values have now endured for 2 months now, making this the longest excessive worry run the market has ever seen.
Related Reading | Crypto Market Crashes Further: Bitcoin (BTC) and Ethereum (ETH) Value Slumps
These indicator values have stayed whereas the whole crypto sector has gone by way of a crash and a big a part of the buyers have gone into the crimson.
Historically, streaks with excessive worry have been when cash like Bitcoin have tended to type bottoms (and equally, tops have occurred throughout excessive greed).
Because of this, some analysts imagine an especially fearful market can present contemporary shopping for alternatives for cryptos.
Related Reading | Bitcoin “Diamond Hands” Start To Break As 1yr+ Supply Ramps Up Selling
The buying and selling approach that follows this concept is known as “contrarian investing.” This well-known quote from Warren Buffet encapsulates the philosophy: “be fearful when others are greedy, and greedy when others are fearful.”
If the historic development is something to go by, the present future of maximum worry could also be when Bitcoin and different cash observe bottoms. And if that’s the case, now could also be when a contrarian investor will imagine to be an excellent shopping for level.
At the time of writing, BTC’s worth floats round $20.4k, down 1% within the final seven days. Over the previous month, the crypto has misplaced 30% in worth.
The beneath chart exhibits the development within the worth of the coin over the past 5 days.
The worth of Bitcoin appears to have dropped down over the previous day | Source: BTCUSD on TradingView
Featured picture from Thought Catalog on Unsplash.com, charts from TradingView.com, Arcane Research