The cryptocurrency Fear & Greed Index has plummeted into the extreme fear territory following the crash in Bitcoin and other assets.
The index makes use of a scale running from 0-100 for representing the investor mentality. All values above 53 imply the traders are greedy, while those below 47 suggest a fearful market. Values lying between the two cutoffs correspond to a net neutral sentiment.
Besides these three main sentiments, there are also two “extreme” zones called the extreme fear (below 25) and extreme greed (above 75). Currently, the market is in the former of the two.
As displayed above, the Fear & Greed Index has a value of 22 at the moment, which is just inside the extreme fear zone. This is a deterioration compared to the last few days, when the indicator held normal fear values.
The reason behind the slide into the extreme fear territory naturally lies in the bearish action that Bitcoin and other cryptocurrencies have faced recently. In particular, the market has suffered a sharp move down during the past day.
The plunge into extreme fear earlier also paved the way to a bottom, although it proved to be only a temporary one. With the Fear & Greed Index back in the zone, it will be interesting to see how the Bitcoin price will develop in the coming days.
At the time of writing, Bitcoin is trading around $105,600, down 13% over the last week.
