After the bitcoin and broader crypto crash, investors in the market are now more fearful than they were on Black Thursday in March 2020.
The Crypto Fear and Greed Index now has an extreme fear value of “7”
The “Fear and Greed Index” is an indicator that tells us about the general market sentiment among crypto investors right now.
The metric uses a numerical scale that runs from zero to a hundred to represent this sentiment. All values of the index below fifty mean that investors are fearful at the moment, while above the range means they are currently greedy.
Indicative values greater than 75 and less than 25 indicate feelings of extreme greed and extreme fear, respectively.
Now, here is a chart from the weekly Mysterious Research report from yesterday that shows the trend in the Crypto Fear and Greed Index over the past year:
Looks like the value of the metric has plunged down in recent days | Source: Arcane Research's The Weekly Update - Week 23, 2022
As you can see in the graph above, the Crypto Fear & Greed Index has been in the “extreme fear” zone for some time.
In fact, this streak of extreme fear, which has been going on for 57 days in a row, is the longest indicator ever.
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Also, at the time the report was released (that is yesterday) the index had a value of 8, the lowest value since March 2021.
The sentiment was actually worse than the Black Thursday incident (which was caused by the COVID-19 pandemic).
Today, the Crypto Fear and Greed Index has declined further in value, now showing only 7.
The sentiment in the crypto market now seems to be the worst it has been since 2019 | Source: Alternative.me
Historically, periods of extreme fear have occurred when coins such as bitcoin have bottomed out, and extreme greed pulls have occurred when tops have formed.
Because of this, some investors consider very low sentiment values to be ideal buying opportunities. As the famous Warren Buffet quote says, “Be fearful when others are greedy and be greedy when others are fearful.”
Related Reading | Here’s What Will Happen If Bitcoin Breaks Below $20K, Predicts Arthur Hayes
Although, the report said that earlier buying in such times has been profitable, but now catching a falling knife is not an easy task.
At the time of writing, the price of bitcoin is down 30% over the past seven days, around $21.1k. In the past month, the value of crypto has dropped by 30%.
The chart below shows the coin’s price trend over the past five days.
The value of Bitcoin has crashed down over the last few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research