As Bitcoin continues to show a bearish trajectory, the cryptocurrency Fear & Greed Index has fallen to its lowest extreme fear level since March.
The index uses the data of the following five factors to determine the investor mentality: trading volume, volatility, market cap dominance, social sentiment, and Google Trends. It then represents the sentiment using a scale running from 0 to 100.
All values above 53 correspond to a net sentiment of greed, while those below 47 imply fear in the market. The indicator being between these two cutoffs naturally suggests a neutral mentality among the investors. Besides these three main zones, there are also two “extreme” sentiments: extreme fear and extreme greed. The former takes place below 25 and the latter above 75.
Currently, the Fear & Greed Index is in one of these zones.
Many major tops and bottoms in the sector have formed alongside a sentiment of extreme greed and extreme fear, respectively. Given this, it’s possible that the latest foray into extreme fear could also lead to a bottom for Bitcoin and others.
When that might happen, however, is anyone’s guess. The latest extreme fear sentiment is the strongest since early March, but the low back then didn’t coincide with BTC’s real bottom.
That said, Bitcoin did find a temporary turnaround just a few days after, which lasted until the end of the month. In April, the market crashed again, and the Fear & Greed Index declined to a low of 18. This time, the extreme fear sentiment was enough to reignite real bullish momentum.
It now remains to be seen whether the current low in the indicator will be enough for the market to reach a bottom, or if sentiment will worsen still.
At the time of writing, Bitcoin is trading around $103,100, down 2% over the last 24 hours.
