Data exhibits the crypto market has been observing excessive concern 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 concern for 2 months now, the longest streak in historical past.
The “fear and greed index” is an indicator that measures the final 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 larger than fifty suggest that buyers are grasping in the meanwhile, 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, here’s a chart that exhibits the development within the crypto concern and greed index over the previous yr:
Looks like the worth of the indicator has been very low not too long ago | Source: Arcane Research's The Weekly Update - Week 24, 2022
As you may see within the above graph, the crypto concern and greed index has a price of 9 proper now, suggesting that the market is extraordinarily fearful.
Such low sentiment values have now continued for 2 months now, making this the longest excessive concern run the market has ever seen.
These indicator values have stayed whereas all the crypto sector has gone by means of a crash and a big a part of the buyers have gone into the crimson.
Historically, streaks with excessive concern 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 a particularly 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 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 long term of maximum concern 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 a really perfect shopping for level.
At the time of writing, BTC’s price 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 during the last 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