Bitcoin Fear And Greed Index Says Market Is Extremely Fearful
As per the latest weekly report from , extreme fear has returned to the BTC market, suggesting now may be the time to buy.The “fear and greed index” is an indicator that tells us about the general sentiment among investors in the Bitcoin market.
Related Reading | Bitcoin Long-Term Holders Start Capitulating Amid Panic
“Contrarian investing” is a trading method that follows this idea. Warren Buffet’s famous quote best sums the philosophy up: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 value of the indicator seems to have plunged down in the last week | Source:As you can see in the above graph, the Bitcoin fear and greed index now has a value of 10, suggesting that the sentiment has declined to extreme greed.
The report notes that the value of the metric hasn’t been worse than this since the COVID crash back in March 2020.
As mentioned before, such a sentiment usually brings with it buying opportunities. However, even so it’s not a sure buy signal either.Related Reading | Will Mercury In Retrograde Bring A Mood Shift In Bitcoin?
The last time the index reached a similar value was back in January of this year. Then, the bottom didn’t actually form until two weeks after the sentiment turned extremely fearful and Bitcoin observed another drop of 20%.So, it’s not certain if now is the time to buy. But nonetheless, such a deep extreme fear sentiment might just be a signal for investors to look out for bottoms forming in the near future.
BTC Price
At the time of writing, Bitcoin’s price floats around $29.5k, down 25% in the past week.
Looks like the price of the crypto has observed a sharp drop today | Source:
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research