When will the extended stretch of extreme fear in crypto end?
Data show that the crypto market almost escaped from the extreme fear territory earlier this week, but sentiment has once again declined in recent days.
The crypto-fear and greed index continues to point to “extreme fear”
According to the latest weekly report from Arcane Research, the current series of extreme fears, which happen to be the longest ever, could not be broken this week.
The “fear and greed index” is an indicator that measures the general investor sentiment in the crypto market.
The calculation uses a numerical scale that goes from zero to a hundred to show this feeling. All values of the index greater than fifty indicate greed, while those below the threshold indicate fear.
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Values greater than 75 and less than 25 toward each end of the range indicate feelings of “extreme greed” and “extreme fear,” respectively.
Now, here’s a chart that shows the trend in the crypto fear and greed index over the last year:
The value of the indicator seems to have slumped back down after a rise | Source: Arcane Research's The Weekly Update - Week 27, 2022
As you can see in the graph above, the crypto fear and greed had a value of 16 two days ago, when the report came out. According to alternative.me, the value is 18 today, something more than that.
Nevertheless, both values are well within the extreme fear territory, which means that the current record streak of bottom sentiment has continued for 70 days now.
During the last week, the value of the indicator seemed to take some momentum upwards as it briefly climbed to 24 at the weekend, which is just on the edge of the extreme fear region.
Related reading | Negative CPI report causes Bitcoin’s market value to lose $ 15 billion in 10 minutes
However, this improvement in sentiment did not last long, and the index fell again, before the longest extreme fear in the history of the crypto market could be broken.
But the report notes that the index may exaggerate the fear due to the special circumstances right now. The value of the fear and greed index depends on two main factors, volatility and trading volume. Binance removes trading fees from its platform has certainly affected these two metric values and thus also the index.
For the crypto market to escape this extreme fear, positive news and price action will be necessary to make investors more optimistic.
BTC price
At the time of writing, Bitcoin’s price is floating around $ 19.7k, down 3% in the last week.
Looks like the value of the crypto has declined over the last few days | Source: BTCUSD on TradingView
Featured image from Pierre Borthiry on Unsplash.com, charts from TradingView.com, Arcane Research
