Data reveals excessive concern sentiment within the Bitcoin market has continued for nearly a month now, the longest stretch since April 2020.
Bitcoin Market Sentiment Remains In Extreme Fear Territory
As per the most recent weekly report from Arcane Research, the crypto concern and greed index has continued to level at excessive concern this week.
The “fear and greed index” is an indicator that measures the final market sentiment amongst Bitcoin and crypto traders.
The metric makes use of a numeric scale that runs from one to hundred for representing this sentiment. All values above “50” signify greed available in the market, whereas these under the brink counsel concern amongst traders.
The excessive values of above 75 and under 25 indicate sentiments of “extreme fear” and “extreme greed,” respectively.
Historically, bottoms within the worth of Bitcoin have tended to kind during times of utmost concern. On the opposite hand, the crypto has noticed tops throughout stretches of utmost greed.
Some traders suppose that due to this, it’s finest to purchase throughout excessive concern, whereas excessive greed is right for promoting.
“Contrarian investing” follows this method. Warren Buffet’s well-known quote sums it up: “Be fearful when others are greedy, and greedy when others are fearful.”
Now, here’s a chart that reveals the pattern within the Bitcoin concern and greed index over the previous yr:
The worth of the indicator appears to have been fairly low not too long ago | Source: Arcane Research's The Weekly Update - Week 21, 2022
As you possibly can see within the above graph, the Bitcoin concern and greed index has a worth of 16 proper now, suggesting that the market is extraordinarily fearful.
These low values of the metric have remained for nearly a month now, making it the longest stretch of utmost concern since proper after the COVID crash again in April 2020.
The report notes that lengthy durations of poor sentiment aren’t extraordinary within the crypto market, however prior to now such stretches have often noticed non permanent spikes to higher sentiment.
In the month of May, there was no such interruption that supplied Bitcoin traders with a glimmer of hope.
At the time of writing, Bitcoin’s price floats round $31.4k, up 6% within the final seven days. Over the previous month, the crypto has misplaced 16% in worth.
The under chart reveals the pattern within the worth of the coin over the past 5 days.
Looks like the worth of the crypto has noticed a push up within the final couple of days | Source: BTCUSD on TradingView
Bitcoin has now maintained strongly above the $31k mark for the primary time because the starting of May. However, in the mean time, it’s unclear whether or not this restoration will final.
Featured picture from Unsplash.com, charts from TradingView.com, Arcane Research