With the recent indication from the crypto fear and greed index extreme fear has gripped the crypto market
Crypto Fear & Greed Index Hits Red
Fear has gripped the cryptocurrency market amid increased volatility, with most digital assets trading in the red throughout the better part of 2022.
The Crypto Fear & Greed Index, which serves as a cross-market sentiment barometer, has hit an all-time low of 8 out of 100 as of May 17, the lowest since March 2020, when the coronavirus outbreak sparked a market catastrophe.
The Crypto Fear & Greed Index is important in the bitcoin world since it shows broad market emotions and forecasts price movement.
Higher numbers indicate that the market has been taken over by greed, and there are a lot of buyers.
Lower values elsewhere imply that investors are wary of getting involved in the crypto market with only a few sellers.
The current acute panic can be seen as a substantial shift in bitcoin market participants’ sentiment, potentially signaling a significant market trend reversal. After reaching a high of 60 for 2022, the index has dropped dramatically in recent weeks.
Bitcoin (BTC) Investors Remain Extremely Fearful
Despite small increases above $30,000, Bitcoin remains extremely fearful. The asset was trading at $30487 at press time, up over 2% in the previous 24 hours.
It is widely expected that if Bitcoin fails to hold the $30,000 mark, it will suffer greater losses, possibly prompting more selling.
Despite the recent huge downturn, Bitcoin began May on a more positive note after breaking beyond the $40,000 barrier.
The news came after the Federal Reserve announced that instead of raising interest rates by 75 basis points, it would boost them by 50 basis points. However, once the gains were short-lived, the market fell into dread.
The price of Bitcoin has primarily skewed towards the fear zone since the beginning of the year, but the latest downward price movement has driven the market into an extreme panic.
In the aftermath of the TerraUSD crash, there is still a concern in the market about the next price action.
In this circumstance, investor sensitivity to any negative market development could further destabilize the crypto market.