Crypto Fear And Greed Index Continues To Point At “Extreme Fear”
The “fear and greed index” is an indicator that tells us about the general market sentiment among crypto investors.
The metric uses a numeric scale that runs from zero to hundred for representing this sentiment. All values below the fifty mark imply a fearful market, while those above the threshold mean investors are greedy right now.Looks like the value of the indicator has been very low in recent weeks | Source:As you can see in the above graph, the current value of the crypto fear and greed index is 10, which suggests the market is extremely fearful at the moment. This run of extreme fear has been going on since more than two months now, and it’s the longest ever such streak in the history of the metric.
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The first event of note is the UST collapse in May. A large stablecoin like Tether USD losing its peg put fear and uncertainty into many investors in the market.
Another is the looming macro uncertainties over the market like the possibility of FED hiking rates and the various governments around the world tightening regulations.Related Reading | Bitcoin “Reserve Risk” Metric Approaches All-Time Lows
These above factors snowballed into a bottom sentiment and lead to larger consequences over the entire crypto market in the form of the crash.A byproduct of the latest crash was the collapse of Three Arrows Capital (3AC), a cryptocurrency hedge fund. Another was the lender company Celsius halting withdrawals and potentially heading towards bankruptcy.
Such negative news is keeping the fear and greed index from recovering from these historic lows. Like a vicious cycle, bad news is leading to more bad news and further fueling the extreme fear sentiment.BTC Price
At the time of writing, Bitcoin’s price floats around $20k, down 1% in the past week.BTC plunges down | Source:
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Arcane Research