The Bitcoin Fear & Greed Index indicates that the typical investor sentiment has been trapped in the extreme fear zone for 13 consecutive days.
Bitcoin Fear & Greed Index Continues to Signal Extreme Fear
The “Fear & Greed Index” is a metric developed by Alternative, which reflects the general sentiment among traders in the Bitcoin and broader cryptocurrency markets. This index evaluates sentiment based on five factors: market cap dominance, trading volume, Google Trends, social sentiment, and volatility. It is represented on a numeric scale ranging from zero to one hundred.
Values exceeding 53 signify a prevailing greed sentiment among investors, whereas those below 47 indicate a dominance of fear. Sentiment levels between these two points are considered net neutral.
Apart from these three main regions, the Fear & Greed Index features two “extreme” zones: extreme fear (at or below 25) and extreme greed (above 75).
Currently, the sentiment among investors in the Bitcoin market, according to the Fear & Greed Index, is as follows:
As shown above, the prevailing sentiment in the cryptocurrency market is one of extreme fear, with the indicator reflecting a value of 23. This sense of despair among investors isn’t a recent development; the index has remained within this range for the past few weeks.
The chart illustrates that the Bitcoin Fear & Greed Index has been signaling extreme fear for 13 consecutive days, highlighting the prevailing FUD in the market. Historically, however, extremely fearful sentiment can sometimes be a positive indicator for BTC and other cryptocurrencies. Digital asset markets often tend to move counter to prevailing public sentiment.
The likelihood of a contrary movement is particularly pronounced in extreme sentiment zones, where significant tops and bottoms have historically formed while the index was in this range.
The low price recorded in November, which has served as the bottom for Bitcoin so far, coincided with an extended period in the extreme fear territory. Nonetheless, this extreme fear phase didn’t reignite sustained bullish momentum for BTC, leading to further consolidation since then.
It remains to be seen if the latest period of extreme fear will lead to a change in this trend or if a prolonged wait for the cycle’s bottom is in store.
BTC Price
At the moment, Bitcoin is trading around $87,500, unchanged from the previous week.
