Following the Bitcoin and wider crypto crash, traders out there at the moment are extra fearful than they have been throughout Black Thursday in March 2020.
Crypto Fear And Greed Index Now Has An Extreme Fear Value of “7”
The “fear and greed index” is an indicator that tells us in regards to the basic market sentiment amongst crypto traders proper now.
The metric makes use of a numeric scale that runs from zero to hundred for representing this sentiment. All values of the index beneath fifty suggest that traders are fearful in the intervening time, whereas these above the brink imply they’re at present grasping.
Indicator values of greater than 75 and fewer than 25 signify sentiments of maximum greed and excessive worry, respectively.
Now, here’s a chart from the weekly Arcane Research report from yesterday that reveals the pattern within the crypto worry and greed index over the previous yr:
Looks like the worth of the metric has plunged down in latest days | Source: Arcane Research's The Weekly Update - Week 23, 2022
As you possibly can see within the above graph, the crypto worry and greed index has been within the “extreme fear” territory for some time now.
In reality, this streak of maximum worry, which has been working for 57 straight days now, is the longest the indicator has ever noticed.
Related Reading | Has Bitcoin Hit Bottom Yet? Here’s What On-Chain Data Says
Also, on the time the report was launched (which is yesterday), the index had a worth of 8, which was the bottom worth since March 2021.
This sentiment was really worse than the Black Thursday occasion from again then (which occurred because of the COVID-19 pandemic).
Today, the crypto worry and greed index has additional dropped in worth, now displaying simply 7.
The sentiment within the crypto market now appears to be the worst it has been since 2019 | Source: Alternative.me
Historically, excessive worry durations have been when cash like Bitcoin have bottomed out, and excessive greed stretches has been when tops have tended to type.
Because of this, some traders take into account very low sentiment values to be very best shopping for alternatives. As Warren Buffet’s well-known quote says, “be fearful when others are greedy, and greedy when others are fearful.”
The report notes, nonetheless, that whereas shopping for has been worthwhile in such occasions earlier than, catching a falling knife like now isn’t a straightforward job.
At the time of writing, Bitcoin’s price floats round $21.1k, down 30% within the final seven days. Over the previous month, the crypto has misplaced 30% in worth.
The beneath chart reveals the pattern within the worth of the coin over the past 5 days.
The worth of Bitcoin has crashed down over the previous couple of days | Source: BTCUSD on TradingView
Featured picture from Unsplash.com, charts from TradingView.com, Arcane Research