The data shows that the bitcoin market has been stuck in a state of extreme fear since May 5, meaning this wave of negative sentiment has been going on for over a month now.
Bitcoin Fear and Greed Index Continues to Point to an Extremely Dangerous Market
According to the latest weekly report Secret researchThe cryptocurrency market is currently experiencing the longest period of extreme fear since the COVID crash in 2020.
The Fear and Greed Index is an indicator that tells us about the general sentiment of investors in the bitcoin and crypto markets in general.
The metric uses a number scale from one to one hundred to represent this sentiment. When the index value is less than fifty, it means that investors are afraid at the moment.
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On the other hand, indicator readings above the threshold mean that investors currently share a sense of greed.
Values towards the end of the range below 25 and above 75 indicate feelings of extreme fear and extreme greed, respectively.
And now here is a chart showing the dynamics of the Bitcoin Fear and Greed Index over the past year:
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 in the above chart, the Bitcoin Fear Greed Index is reading 15 right now, suggesting that the general mood is one of extreme fear.
These low metrics have been around for over a month now. Such a long streak was last seen after the collapse of COVID two years ago. The run then went on for 48 consecutive days before sentiment improved.
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Historically, bottoms have typically formed during times of extreme fear and peaks during times of extreme greed.
Because of this, some investors believe that the early periods provide ideal opportunities to buy bitcoins, while the latter can be suitable selling points.
A trading technique that follows this idea is called opposite investing. This is best expressed by Warren Buffett’s famous quote:
Be afraid when others are greedy and be greedy when others are afraid.
If this philosophy is followed, then the current mood may mean that now is the time to buy bitcoin.
At this point, it is unclear how long this streak of extreme fear will last. It may be as long or longer than the previous one, or the mood may soon rise.
At the time of writing, the price of Bitcoin is hovering around $30.4k, down 3% over the past week.
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
Credit : www.newsbtc.com