Bitcoin Fear And Greed Index Has Dipped To Lows Not Seen Since July

Following the Bitcoin crash to $42k, the fear and greed index has declined to extreme fear values not seen since July of last year. Bitcoin Fear And Greed Index Points At “Extreme Fear” As pointed out by an analyst in a CryptoQuant post, the BTC fear and greed index has dropped to very low values. The “fear and greed index” is a crypto indicator that measures the general sentiment among investors in the market. The index uses numbers to represent the sentiment on a numeric scale that goes from zero to hundred. Values of the indicator above fifty mean that the current holder sentiment is that of greed. And values below 50 imply that the market is fearful at the moment. Index values below 25 and those above 75 fall into the “extreme” category, signifying extreme fear and extreme greed, respectively. The indicator usually remains in the greed zone during bull runs. Extreme greed values have historically signaled that a correction in the price of Bitcoin may be near, and a top could form. On the other hand, values of fear may be there during bearish trends, and extreme fear might imply that a bottom could soon form. Related Reading | Bitcoin Whales Contribute 90% Of Money Inflow of Exchanges, How Can We Follow and Make Profits? Now, here is a chart that shows the trend in the Bitcoin fear and greed index over the past year: The crypto fear and greed index seems to have sunk to extreme fear values | Source: CryptoQuant As you can see in the above graph, the indicator has now dipped to a value of 15. This is the lowest the metric has gone since July of the previous year. Related Reading | Start Of Bear Period? Current Bitcoin Trend Looks Similar To June Incidentally, the day in July when such low values occurred was also around when the Bitcoin price bottomed out. However, the quant in the post notes that this doesn’t necessarily mean that the current price has hit a bottom as well. Following the May crash, the months of May and June also observed similar extreme fear sentiments multiple times. So, it’s rather possible that the current low values of the indicator may persist for a while, just like back then, before the price finds its way back up. BTC Price At the time of writing, Bitcoin’s price floats around $42.4k, down 12% in the last seven days. Over the past month, the crypto has lost 16% in value. The below chart shows the trend in the price of BTC over the last five days. After the crash down to $42k a few days back, BTC's price further plunged down to $41k yesterday | Source: BTCUSD on TradingView Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Crypto Market Bloodbath Creates Largest Stretch Of Fear Since April Peak

As the downtrend in the crypto market continues, so does extreme fear. What’s inspiring the sell-off? Is it Omicron? Or is it Evergrande? Is it a conspiracy? Or is it the holidays? All those questions and more have had the Fear and Greed Index pointing left for a month straight. What does this mean? Where do we go from here? That’s what we’re here to explore.  Related Reading | Blood In The Streets: Crypto Market Becomes Fearful As Bitcoin Dives But first, let’s talk about the Fear and Greed Index. One of the many Bitcoin indicators, it measures the market’s general sentiment at the moment. Zero is extreme Fear. A hundred is extreme Greed. And the indicator oscillates between those two at any given time. It’s been said that the crypto market is very emotional. The Fear and Greed Index is there to keep investors from making irrational decisions based on sentiment alone.  Fear And Greed Index shows Extreme Fear | Source: Arcane Research’s The Weekly Update What’s The Fear And Greed Index Saying Now? According to Arcane Research’s The Weekly Update, fear has settled in: “The Fear and Greed Index has now signaled “Fear” or “Extreme Fear” for almost one month straight. The last time we saw such a prolonged fearful market sentiment was at the beginning of the summer when the market sentiment was fearful for more than two months straight. With the sustained consolidation of bitcoin, the late autumn euphoria has dampened, and the overall sentiment seems very negative at the moment.” The report also says that, “during steady sell-offs, bitcoin tends to outperform the overall crypto market.” And this time was no exception, BTC “outperformed all indexes so far in December, seeing a negative return of -18% after a relatively flat second week of trading this month.” On the other hand, “the Small Cap index has seen a loss of nearly a third of its value in December.“ What does this mean in general? “The bitcoin dominance has risen by 1.13% in the last week. This is the third time we’re seeing bitcoin dominance bottom at 40% in 2021. The last two times were May 19th and Sep 13th. It seems that the 40% threshold is a difficult area for alts to sustain” BTC price chart for 12/15/2021 on Eightcap | Source: BTC/USD on TradingView.com What Can We Expect In The Future? To get our dose of technical and on-chain analysis, let’s give the mic to this month’s Fear & Greed Newsletter: “A major factor here is the cycle support band. We cannot ignore the fact that Bitcoin had just closed 2 consecutive weeks below the market support band. Historically, this meant that we’d see a longer consolidation phase before we could have a true reversal in the trend. The takeaway here is this, as long as Bitcoin closes the week below the cycle support band, we shouldn’t expect any major breakout in price to take place.” Every dog has its day, though. A week ago, analyzing a very similar market sentiment, NewsBTC informed you: “A “Fear and Greed” Index on Extreme Fear levels, according to certain analysts, has historically preceded crypto market local bottoms. However, a run into new highs could see an obstacle as the macro-economic outlook turn complex.” Related Reading | Bitcoin Price Bloodbath: Is El Salvador A “Sell The News” Event? It’s also important to remember that only two months ago, we were in a similar situation and the sentiment did a complete 180 in a matter of weeks.  “The indicator dipped all the way down to extreme fear on 30th September, but in under two weeks the sentiment has already rebounded back to extreme greed. The report notes that this shows how fast the sentiment can change among the crypto market.” With that being said, and a disclaimer that this isn’t financial advice, in a situation like this there’s only one thing we could say… hodl the line!  Featured Image: PublicDomainPictures on Pixabay| Charts by TradingView

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Crypto Flipsider News – Bitcoin Sell-Off Ignites Extreme Fear, LUNA Reaches New ATH, $196 Million Bitmart Hack, Metaverse Tops NFT Sales, Binance to Relaunch in the U.K.

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