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The Crypto Fear and Greed Index Shows 'Extreme Fear' and Bearish Sentiment, Uncertainty in Market.

01 Jun 2022 By : COIN GABBAR
The Crypto Fear and

The Crypto Fear and Greed Index Shows 'Extreme Fear' and Bearish Sentiment, Uncertainty in Market.

Bitcoin sentiment, as measured by the Crypto Fear and Greed Index (CFGI), has remained in the "extreme fear" region for several weeks. While bitcoin gained some ground on Monday, the CFGI's ranking score of 16 out of 100 still places it in the "extreme fear" category.

The Crypto Dread and Greed Index (CFGI) hit the "extreme fear" range with a score of 22 about 45 days ago. The 24-hour bitcoin price range on April 15 was between $39,823.77 and $40,709.11 per unit. Since then, markets have continued to fall, and on May 12, the value of Bitcoin fell to a new low of $25,401, which was lower than the previous low in July last summer. If someone bought Bitcoin on May 12th, they would be up more than 24% against the US dollar today.

Despite recent improvements, the CFGI remains in the "extreme fear" zone, and the ranking is lower than it was on April 15. The CFGI ranking score is 16 out of 100 at the time of writing, but it doesn't mean markets will stay that way. Extreme fear may indicate that investors are overly feared. That might be a wonderful time to invest. The market is due for a correction when investors become excessively enthusiastic.

Extreme fear, on the other hand, can lead to more capitulation, and the so-called buying opportunity may be significantly reduced. It's also possible that the current time frame is a tiered buying opportunity, with people content to buy BTC on the way down. The CFGI's simple assumptions are just that: they may be accepted as facts, but they may never be realised.

Similarly, just because "investors are growing excessively greedy," as the CFGI claims, doesn't mean crypto prices will correct. This means that if someone followed such advice, they might end up selling BTC at a lower price than they would have made if they had waited. Then there's the age-old investment wisdom that says it's fine to profit along the road.

For well over a month, crypto market sentiment has been in the "extreme fear" category, according to the CFGI. The index reached a ranking score of 10 yesterday, May 30, indicating that the latest CFGI score of 16 represents an improvement. Following the recent Terra incident, Google Trends numbers for the term "bitcoin" reveal that interest has increased.

Surprisingly, data from Google Trends (GT) shows that interest in bitcoin had been waning for a while prior to the Terra LUNA and UST debacles. However, GT data shows that the search term "bitcoin" had its best GT score (100) since the second week of June 2021 during that precise week (May 8-14). However, in the week following the Terra LUNA and UST market meltdowns, the GT data score for the phrase "bitcoin" fell by 45 percent.