The crypto market pulls out of extreme fear, but only narrowly
Data shows that sentiment in the crypto market has improved from a state of extreme fear, but is still quite close to re-entering the zone.
Crypto fear and greed index points to a fearful market
The “Fear and Greed Index” is an indicator that tells us about the general sentiment among investors in the cryptocurrency market.
The calculation uses a numerical scale that goes from zero to one hundred to show this feeling. When the value of the index is below fifty, it means that the market is scared right now.
On the other hand, values of the indicator higher than the threshold suggest a dominant feeling of greed among crypto investors.
Values above 75 and below 25 (that is, those towards the end of the range) indicate feelings of “extreme greed” and “extreme fear”, respectively.
The extremes of sentiment have been historically significant for coins like Bitcoin, as the peaks have typically occurred in the former periods, while the troughs have occurred in the latter.
Now, here’s a chart from this week’s Arcane Research report showing the trend in the value of the Fear and Greed Index over the past year:
The value of the metric seems to have surged up in recent days | Source: Arcane Research's The Week Onchain - Week 36, 2022
As you can see in the graph above, the Crypto Fear and Greed Index dropped to extreme fear values a while ago.
Recently, however, the investor mentality in the market marked an improvement as the indicator reached a value of 34 a couple of days back, when the report came out.
This is a significant leap into extreme fear territory, but it’s also two days old. Yesterday, as an effect of the Bitcoin price falling, the index also saw a plunge, reaching a value of just 27.
Today is no different; The metric’s latest reading is 28, just three units away from the bottom sentiment region.
The market continues to observe fear | Source: Alternative
The report notes that the index still showing fear suggests investors don’t believe the seemingly endless bear market is over just yet.
BTC price
At the time of writing, Bitcoin’s price is hovering around $20.1k, up 5% in the last seven days. Over the past month, the crypto has lost 17% in value.
The chart below shows the trend in the price of the coin over the last five days.
Looks like the value of the crypto has observed sideways movement following the plunge a few days back | Source: BTCUSD on TradingView
Featured image from Traxer on Unsplash.com, charts from TradingView.com, Arcane Research
