Cardano, XRP Sentiment Plummets, Time To Be Greedy While Others Are Fearful? NewsBTC
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The crypto market has found itself at odds since the price of bitcoin had fallen to $20,000. This remains an important technical level for the digital asset because it is right above its previous cycle peak. As such, investors across the space watch with bated breaths to see if bitcoin will be able to hold this level. This has, in turn, led to a decline in investor sentiment during this time, causing the Fear & Greed Index to plunge low.
Crypto Index Sits At 25
The Crypto Fear & Greed Index is an indicator that draws from a number of metrics to give an aggregate score to represent how investors are feeling toward the market. It ranks these across four categories, and presently, investor sentiment falls in the lowest of these.
In its most recent update, the Fear & Greed index places the market in the extreme fear territory with a score of 25. This is after the index had hit its lowest of 20 in more than a month, signifying some rise in positive sentiment in the last day.
However, the present score is not so good for the crypto market. With a sentiment like this, investors are wary of putting any money into the market, causing panic and leaving the playing ground to the sellers. This works to push the prices of digital assets in the space even further down.
Bitcoin Struggles With $20,000
The $20,000 mark has been one of the hardest levels to maintain for bitcoin. Volatility always seems to shoot up whenever bitcoin is at this point, leading to erratic movements in price. This way, the digital asset continues to move above and below $20,000.
Nevertheless, bulls continue to put up a fight at this level because there is no significant support below this level except at $17,600. This cycle’s low, which had plummeted below the previous cycle peak, puts bitcoin in a perilous position.
Historical data puts bitcoin at least 80% down from its all-time high for the bottom of the bear market to be in. If the market follows this trend, then $17,600 may not be the bottom for the market. Bitcoin is only about 70% down from its all-time high as it currently stands. An 80% drawdown would put it around $15,000.
However, it is important to keep in mind that bitcoin has broken different historical trends during this cycle. An example is that its price has never fallen below its previous cycle peak, so an extension to this deviation could see bitcoin shake off the expected 80% drawdown.
Featured image from CNBC, chart from TradingView.com
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Following the Bitcoin and wider crypto crash, investors in the market are now more fearful than they were during Black Thursday in March 2020.
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 numeric scale that runs from zero to hundred for representing this sentiment. All values of the index below fifty imply that investors are fearful at the moment, while those above the threshold mean they are currently greedy.
Indicator values of more than 75 and less than 25 signify sentiments of extreme greed and extreme fear, respectively.
Now, here is a chart from the weekly Arcane 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 above graph, the crypto fear and greed index has been in the “extreme fear” territory for a while now.
In fact, this streak of extreme fear, which has been running for 57 straight days now, is the longest the indicator has ever observed.
Related Reading | Has Bitcoin Hit Bottom Yet? Here’s What On-Chain Data Says
Also, at the time the report was released (which is yesterday), the index had a value of 8, which was the lowest value since March 2021.
This sentiment was actually worse than the Black Thursday event from back then (which occurred due to the COVID-19 pandemic).
Today, the crypto fear and greed index has further dropped in value, now showing just 7.
The sentiment in the crypto market now seems to be the worst it has been since 2019 | Source: Alternative.me
Historically, extreme fear periods have been when coins like Bitcoin have bottomed out, and extreme greed stretches has been when tops have tended to form.
Because of this, some investors consider very low sentiment values to be ideal buying opportunities. As Warren Buffet’s famous quote says, “be fearful when others are greedy, and greedy when others are fearful.”
Related Reading | Here’s What Would Happen If Bitcoin Breaks Below $20K, Arthur Hayes Predicts
The report notes, however, that while buying has been profitable in such times before, catching a falling knife like now isn’t an easy task.
BTC Price
At the time of writing, Bitcoin’s price floats around $21.1k, down 30% in the last seven days. Over the past month, the crypto has lost 30% in value.
The below chart shows the trend in the price of the coin over the last 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
Data shows the Bitcoin fear and greed index has continued to display low values for the third straight week as the market remains fearful.
Bitcoin Fear And Greed Index Currently Points At “Fear”
According to the latest weekly report from Arcane Research, the BTC market has now remained fearful for the 3rd consecutive week.
The “fear and greed index” is an indicator that tells us what the general sentiment among investors in the Bitcoin market currently is.
The metric uses a numeric scale that runs from one to hundred for representing this sentiment. All values above fifty signify that the market is greedy right now
On the other hand, indicator values below the cutoff show that the market sentiment is that of fear at the moment.
End values of above 75 and below 25 represent investor sentiments of extreme greed and extreme fear, respectively.
Historically, tops have tended to form during periods of extreme greed, while bottoms have formed during extreme fear.
Because of this, some investors believe that it’s best to buy during the former, while the latter periods are best for selling.
Related Reading | Glassnode Data Shows A Bullish Bitcoin Crossover Has Recently Occurred
Contrarian investing is a trading technique that uses this idea. This famous quote from Warren Buffet encapsulates the philosophy: “Be fearful when others are greedy, and greedy when others are fearful.”
Now, here is a chart that shows the trend in the Bitcoin fear and greed index over the past year:
The BTC market seems to be fearful at the moment | Source: Arcane Research's The Weekly Update - Week 16, 2022
As you can see in the above graph, the Bitcoin fear and greed index is currently showing a value of 27, corresponding to a sentiment of fear.
This value is right on the edge of extreme fear, and the market has stayed around this value for the past few weeks. During that period, the indicator’s value has also had some dips to extreme fear.
Related Reading | Bitcoin Bearish Signal: 600-Day MA Starts To Break Down
The reason behind this trend may be the fact that BTC has been stuck in consolidation for a while now, showing no real movement.
The report suggests that investors seem to be anxiously waiting for Bitcoin to make a move before they take any action.
BTC Price
At the time of writing, Bitcoin’s price floats around $39k, down 7% in the last week. Over the past month, the crypto has lost 12% in value.
The below chart shows the trend in the price of the coin over the last five days.
Looks like the price of the crypto has plunged down over the past day | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research
Data shows the Bitcoin fear and greed index has now reached the highest level since the peak in November as the price of the crypto rallies up.
Bitcoin Fear And Greed Index Now Points At “Greed”
As per the latest weekly report from Arcane Research, the BTC fear and greed index has surged to values of greed sentiment this week.
The “fear and greed index” is an indicator that tells us about the current general market sentiment among Bitcoin investors.
The metric uses a numeric scale that travels from one to hundred for representing this sentiment. All values above fifty signify that investors are greedy at the moment. While those below the cutoff suggest a fearful market.
Values above 75 and below 25, that is, the values toward the ends of the range, represent extreme greed and extreme fear, respectively.
Now, here is a chart that shows the trend in the Bitcoin fear and greed index over the past year:
Looks like the value of the indicator has surged up recently | Source: Arcane Research's The Weekly Update - Week 12, 2022
As you can see in the above graph, the Bitcoin fear and greed index has sharply risen over the past week. The indicator now has a value of 56, which shows the market is getting greedy.
This value of the metric is now more than in any other period in the year 2022 so far, and is the highest since the peak in early November of last year.
Related Reading | Glassnode’s RHODL Ratio May Suggest Bitcoin Market Is Near Capitulation
Historically, Bitcoin peaks have tended to happen while the sentiment is that of extreme greed, and bottoms have formed during periods of extreme fear.
There is a popular trading technique called “contrarian investing” that makes use of this fact. Traders following this methodology think that the best time to buy is during extreme fear, while extreme greed is when one should sell.
Related Reading | Bitcoin Weekly Momentum Flips Bullish For First Time In 2022: What Data Says
This famous quote by Warren Buffet sums up this philosophy: “Be fearful when others are greedy, and greedy when others are fearful.”
So, following the line of thinking of contrarian investors, the current market sentiment turning greedy may be a sign that you should now start getting fearful instead.
BTC Price
At the time of writing, Bitcoin’s price floats around $47.3k, up 12% in the last seven days. Over the past month, the crypto has gained 26% in value.
The below chart shows the trend in the price of the coin over the last five days.
The price of Bitcoin seems to have surged up over the past few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research
Data shows the Bitcoin market has turned greedy again after almost three months of fear sentiment among investors.
Bitcoin Market Becomes Greedy Again After Almost Three Months Of Fear
The relevant indicator here is the “fear and greed index,” which tells us what the general sentiment among investors currently is.
The metric uses a numeric scale that goes from zero to hundred for representing this sentiment. All values below fifty fall into the “fear category,” while those above belong to “greed.”
When the index shows extreme values of above 75 and below 25, the market sentiment is that of extreme greed and extreme fear, respectively.
Some investors prefer to sell when the market is extremely greedy as tops have historically formed during such periods. Similarly, they also think buying during extreme fear is better as bottoms tend to usually occur then.
Related Reading | No New Lows: “Parabolic” Bitcoin Indicator Could Suggest The Local Bottom Is In
There is a famous Warren Buffet quote that resonates with this philosophy: “be fearful when others are greedy, and greedy when others are fearful.”
Now, here is a chart from this week’s Arcane Research report that shows the trend in the Bitcoin fear and greed index over the past year:
The indicator's value seems to have sharply risen recently | Source: The Arcane Research Weekly Update - Week 5
As you can see in the above graph, when the report came out yesterday the market sentiment had almost exited the fear territory as the indicator showed a value of 48.
Since November, the market had been quite fearful, often dipping into extreme fear. But recently the metric has observed a sharp uptrend, and today, the investor sentiment is finally back to greed for the first time in three months as the index’s value is now around 54.
The Bitcoin fear and greed index has now crossed the fifty mark | Source: Alternative.me
The market sentiment turning to that of greed can prove to be bullish for the price of Bitcoin as sucha sentiment usually occurs during bull rallies.
Related Reading | Bitcoin Taker Buy/Sell Ratio Shows “Buy” Signal As BTC Lifts Off
BTC Price
At the time of writing, Bitcoin’s price floats around $43.5k, up 13% in the last seven days. Over the past month, the crypto has gained 5% in value.
The below chart shows the trend in the price of BTC over the last five days.
BTC's price seems to have surged over the past few days | Source: BTCUSD on TradingView
Over the past couple of weeks, Bitcoin has enjoyed some sharp uptrend. Yesterday, the price of the crypto briefly broke past the $45k mark, but it wasn’t long before the coin came back down to the current levels.
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research