When the greed? The Bitcoin Market Crushed Under a Whole Month of Fear


Data shows that the Bitcoin market has been stuck in a state of extreme fear since May 5, meaning that this streak of bottom sentiment has lasted for more than a full month.

Bitcoin Fear and Greed Index Continues to Point to an Extremely Fearful Market

According to the latest weekly report from Arcane Research, the cryptocurrency market is currently going through its longest streak of extreme fear since the COVID crisis in 2020.

The “Fear and Greed Index” is an indicator that tells us about the general sentiment of investors in Bitcoin and the broader crypto market.

The metric uses a numerical scale from one to one hundred to show this sentiment. When the value of the index is less than fifty, it means that investors are scared at the moment.

Related Reading | Glassnode: Bitcoin Long-Term Holders Own 90% of Supply at Profit

On the other hand, indicator values ​​above the threshold imply that investors currently share a sentiment of greed.

Values ​​towards the end of the range below 25 and above 75 indicate feelings of extreme fear and extreme greed, respectively.

Now, here is a chart showing the trend in the Bitcoin Greed and Fear Index over the past year:

Bitcoin Greed and Fear Index

The value of the metric seems to have been very low recently | Source: Arcane Research's The Weekly Update - Week 22, 2022

As you can see from the chart above, the Bitcoin Greed and Fear Index is showing a value of 15 at the moment, which suggests that the overall sentiment is one of extreme fear.

These low metric values ​​have been there for over a month. Such a long streak last happened after the COVID crash two years ago. The streak then lasted 48 consecutive days before sentiment improved.

Related Reading | Crypto Investors Find Safety in Stablecoins, Bitcoin, Ditch Altcoins En Masse

Historically, low points have tended to form during periods of extreme fear, while high points have occurred during periods of extreme greed.

Because of this, some investors believe that the earlier periods provide ideal buying opportunities for Bitcoin, while the latter could be a suitable selling point.

The trading technique that follows this idea is called contrarian reversal. Warren Buffet’s famous quote sums it up best:

Be fearful when others are greedy and greedy when others are fearful.

If this philosophy is anything to go by, then the current sentiment may mean that now might be the time to buy Bitcoin.

At the moment, it is not clear how long this streak of extreme fear will last. It could be as long or longer than the last one, or sentiment could soon see an improvement.

BTC price

At the time of writing, the Bitcoin price hovers around $30,400, down 3% from last week.

Bitcoin price chart

Looks like the value of BTC has jumped back above $30k | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradngView.com, Arcane Research

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