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Data reveals the crypto market has been observing excessive concern for 2 months now, leaving traders in panic as Bitcoin has crashed to $20k.
Crypto Fear And Greed Index Is Still Pointing To “Extreme Fear”
As per the newest weekly report from Arcane Research, the cryptocurrency market has now been going through 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 traders 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 traders are grasping in the meanwhile, whereas these beneath the brink 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 reveals the development within the crypto concern and greed index over the previous yr:
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 possibly can see within the above graph, the crypto concern and greed index has a worth of 9 proper now, suggesting that the market is extraordinarily fearful.
Such low sentiment values have now persevered for 2 months now, making this the longest excessive concern 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 complete crypto sector has gone by a crash and a big a part of the traders have gone into the pink.
Historically, streaks with excessive concern have been when cash like Bitcoin have tended to kind bottoms (and equally, tops have occurred throughout excessive greed).
Because of this, some analysts imagine an especially fearful market can present recent shopping for alternatives for cryptos.
Related Reading | Bitcoin “Diamond Hands” Start To Break As 1yr+ Supply Ramps Up Selling
The buying and selling method 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 future of maximum concern could also be when Bitcoin and different cash observe bottoms. And in that case, now could also be when a contrarian investor will imagine to be a perfect shopping for level.
Bitcoin Price
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 reveals 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
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