Market Sentiment Dangerously Negative As Crypto Fear Index Drops To Two-Year Low
26 May 2022 - 3:00AM
NEWSBTC
Crypto market sentiment has dropped into the far negative once
more. This has been one in the making ever since the Terra crash
had begun and investors had scrambled to leave the market. A
culmination of this and speculations that the market is headed into
one of the longest bear trends ever recorded has now seen sentiment
fall to levels not recorded since 2020. In The Extreme Fear Region
Now, the crypto market sentiment has not been positive for a while.
Most of the last two months have been spent in the fear territory
and April had closed out in extreme fear. Nevertheless, the scores
on the Fear & Greed Index had remained somewhat high until the
LUNA crash. This has sent the market into extreme fear overdrive as
the Fear & Greed Index now displays a score of 12, the lowest
it has been in two years. Related Reading | Bitcoin, Ethereum
Exchange Inflows Suggest Sell-Offs Are Far From Over More notable
is the fact that the index had touched as low as 8 last week. This
makes it the second-lowest score that has ever been recorded on the
index, the lowest being a score of 5 in 2018. What had followed
from its May 17th lows was a bit of a recovery but even that had
not held up well. As of the time of writing, the index has lost
another point and is now sitting at 11. Market sentiment
falls to extreme greed | Source: Arcane Research This extreme fear
reading mirrors how investors are feeling when it comes to
investing in cryptocurrencies at the moment. Simply put, investors
do not want to put money into the market and this is evidenced by
the exchange inflows that have been rocking the space. These
exchange-wide sell-offs only contribute to the already declining
sentiment, sending digital assets further down. Is It Time To Buy
Crypto? Historically, when the crypto market sentiment has declined
this much, it can be seen as an opportunity to get into the market
right before recovery. This has worked out many a time for
investors. But there have also been times when it hasn’t returned
exactly what was expected. Namely, the downtrend had continued even
when market sentiment was in the extreme fear territory. Total
market cap recovers to $1.25 trillion | Source: Crypto Total Market
Cap on TradingView.com Nevertheless, this is still regarded as one
of the easiest buy indicators of all time. It is incredibly popular
due to the fact that traders and investors will often try to use
market sentiment to gauge when the bottom of the market is in and
get in at the right moment. Related Reading | Institutional
Investors Seek Safe Haven In Crypto Products Amid Market
Uncertainty These are mainly used for the leading cryptocurrencies
in the market such as Bitcoin and Ethereum since they are easier to
track. But like with anything in a highly volatile market such as
the crypto market, there is no such thing as an exact science. So
while ‘buying the blood’ can yield good results, they can easily go
bad. Featured image from The New York Times, charts from
Arcane Research and TradingView.com Follow Best Owie on Twitter for
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