Crypto Fear and Greed Index Could Hint at Another Plunge

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Arman Shirinyan

Popular index paints a bleak picture that could hint at another BTC plunge

The leading social indicator called “Fear and Greed Index” developed by Alternative.me is one of the best ways to determine the current social sentiment in the cryptocurrency market. In addition to assessing the current state of the market, it can give us some indication of upcoming events.

According to the official website, the Fear and Greed index currently remains at the value of 26, which marks the market as fearful. Ultimately, the market persisted in “extreme fear”, a more aggravated version of the current level.

Source: Alternative.me

In “Fear” mode, investors tend to steer their funds away from exchanges, refrain from trading large portions of their portfolios, and prefer to hold their funds in stable assets over less volatile investment tools than some cryptos. -currencies.

Over the past two weeks, the Market Sentiment Index has been relatively stable as cryptocurrency market volatility stabilized after the FTX implosion. Despite the continued migration of funds from cryptocurrency exchanges to private wallets, the panic in the market has subsided with the majority of investors remaining calm compared to the same period about a month ago.

Unfortunately, historical analysis of the chart shows that such periods do not last long. A significant drop in volatility in the market is an excellent condition to calm investors who sold most of their assets during the storm in panic, causing the state of “extreme fear”. But the low volatility is temporary, and depending on the corresponding indicators and factors, the market is more likely to fall further rather than rebound with the next spike in volatility.

At press time, Bitcoin is trading at $17,159 and is showing the lowest intraday volatility we have seen in the past two months.

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