Market Enters Extreme Fear Zone Again As Bitcoin Drops To $36k


The crypto fear and greed index shows that the market is back in extreme fear territory as Bitcoin has fallen again to $36k.

Market Sentiment Returns to Extreme Fear as Bitcoin Drops to $36k

Recently, as the price of the crypto bounced back above $38k, market sentiment soared to that of fear. Today, however, the price of BTC has fallen again, leading to a return to extreme anxiety.

The relevant indicator here is the “Fear and Greed Index”, which measures general sentiment among Bitcoin investors.

The metric uses a numerical scale ranging from zero to one hundred to represent sentiment. Values ​​below fifty mean the market is currently anxious, while values ​​above the threshold indicate a sense of greed.

The extreme values ​​of more than 75 or less than 25 imply that investors are currently dealing with extreme greed or extreme fear, respectively.

Related literature | Bitcoin sees poor demand as investors try to defend $37K, is BTC in trouble?

Very high values ​​of the indicator usually occur around tops. On the other hand, there can be very low values ​​during soil formations.

Therefore, some traders believe that it is best to sell during extreme greed and buy during extreme fear. As Warren Buffet put it, “Be afraid when others are greedy, and greedy when others are afraid.”

Now, here’s a chart of the last weekly mysterious investigation report showing how the Bitcoin fear and greed index briefly rose in value recently:

The trend in the metric over the past year | Source: Arcane Research Weekly Update – Week 4

As you can see in the chart above, the Bitcoin market has been extremely anxious for a while now as the price continued to struggle.

However, a few days ago, sentiment improved a bit to that of fear as the crypto showed some recovery. On Sunday, the indicator shot up to a value of 30, its highest point in the year 2022.

Related literature | Volume of Bitcoin’s Illiquid Supply Points to Growing Bullish Sentiment

At the time of the report’s release with the chart, the stat was still at 26. But now that Bitcoin has fallen back below $37k, market sentiment has once again turned into one of extreme fear.

The fear and greed index currently has a value of 20 | Source: alternative.me

It is currently unclear when sentiment may see a real improvement. During the May-July 2021 mini-bear period, such extreme fear levels persisted for a few months before bottoming.

BTC price

At the time of writing, Bitcoin price is hovering around $36.7k, down 0.1% in the past week.

The price of BTC has fallen in the last 24 hours | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research

Leave a Reply

Your email address will not be published.