Data shows the crypto market has been fearful for 171 days already, will the streak continue into October and reach 200 days?
Crypto Fear and Greed Index Points to Extremely Fearful Market
According to the latest weekly report from Arcane Researchthe crypto market continues to show a sense of fear since April of this year.
The “Fear and Greed Index” is an indicator that measures general investor sentiment in the cryptocurrency market.
To represent sentiment, the metric uses a numerical scale that ranges from zero to one hundred. All index values above 50 imply that the market is greedy, while those below the threshold suggest fearful investors.
Within these main sentiments, there are two areas that have historically been particularly important for the prices of coins like Bitcoin. These are the “extreme greed” and “extreme fear” regions and they occur at values above 75 and below 25, respectively.
The relevance of the extreme sentiments is that the highs generally took place in the first type of periods, while the lows formed in the later ones.
Now, here is a chart that shows the trend of the Crypto Fear and Greed Index over the past year:
The value of the metric seems to have gone down in recent days | Source: Arcane Research's The Weekly Update - Week 37, 2022
As you can see in the chart above, the crypto fear and greed index recently saw a small increase in the Ethereum meltdown, but as soon as investors realized it was an information selling event, sentiment fell sharply. .
Two days ago when the report came out, the indicator had a value of 23, which would suggest an extremely fearful mentality. Since then it hasn’t moved much as the current value is still 22.
The crypto market has been in a state of fear since April, making it a continuous streak of this sentiment for 171 days now.
During the relief rally in August, the indicator came the closest to breaking out of this region and ending what became the longest scare streak in index history. However, before investors could embrace greed, the rally ended and sentiment immediately plunged.
Currently, it is unknown when the race will finally end. If it continues and lasts until October, crypto investors would have seen 200 days of fear.
At the time of writing, the price of Bitcoin is hovering around $19.2,000, down 5% in the past seven days. Over the past month, the crypto has lost 10% in value.
Looks like the price of the coin has been mostly moving sideways in the last few days | Source: BTCUSD on TradingView
Featured image from Thought Catalog on Unsplash.com, charts from TradingView.com, Arcane Research