Data shows the crypto investor sentiment has once again plunged back into extreme fear, as the crash in the market continues.
Crypto Fear And Greed Index Now Points To A State Of “Extreme Fear”
The “fear and greed index” is an indicator that measures the general sentiment among investors in the crypto market.
The metric uses a numeric scale that runs from zero to hundred for displaying this sentiment. All values above fifty imply a greedy market, while those below the threshold suggest fearful holders.
Values of more than 75 and less than 25 denote special sentiments called “extreme greed” and “extreme fear,” respectively.
The significance of extreme greed is that cyclical tops in Bitcoin and other coins have tended to form during periods with this sentiment.
On the other hand, bottoms have usually formed in stretches where the market has been extremely fearful.
Now, here is a chart that shows the trend in the crypto fear and greed index over the past year:
Looks like the value of the metric has taken a plunge in recent days | Source: Alternative
As you can see in the above graph, the crypto fear and greed index has been showing fear values for a year now, with the market actually spending a lot of this period all the way down in extreme fear.
The latest rally in the prices of coins like Bitcoin significantly improved the investor sentiment recently, as the indicator rose from 20 to 40, implying it was nearly on the edge of greed.
However, the latest market-wide crash over the last couple of days has dealt a violent blow to the holder mentality, making it plummet back into the extreme fear zone.
The fear and greed index needle currently points at 22, an extreme fear value | Source: Alternative
The latest failure to escape into greed means the market has been fearful for around a year now (with the exception of some very brief spikes), continuing the longest stretch of such sentiment since the indicator was conceived back in 2018.
And the way the market environment is currently developing, the streak is probably going to go on for a while still.
At the time of writing, Bitcoin’s price floats around $16.2k, down 19% in the last week. Over the past month, the crypto has lost 16% in value.
The below chart shows the trend in the price of the coin over the last five days.
The value of the crypto seems to have taken a deep dive during the last couple of days | Source: BTCUSD on TradingView
Featured image from Elizabeth Meyers on Unsplash.com, charts from TradingView.com, Alternative.me