Bitcoin Observes Longest Stretch Of Extreme Fear Since April 2020

Keshav Verma

3 years ago

3 mins read

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Data shows extreme fear sentiment in the Bitcoin market has continued for almost a month now, the longest stretch since April 2020.

Bitcoin Market Sentiment Remains In Extreme Fear Territory

As per the latest weekly report from Arcane Research, the crypto fear and greed index has continued to point at extreme fear this week.

The “fear and greed index” is an indicator that measures the general market sentiment among Bitcoin and crypto investors.

The metric uses a numeric scale that runs from one to hundred for representing this sentiment. All values above “50” signify greed in the market, while those below the threshold suggest fear among investors.

The extreme values of above 75 and below 25 imply sentiments of “extreme fear” and “extreme greed,” respectively.

Historically, bottoms in the price of Bitcoin have tended to form during periods of extreme fear. On the other hand, the crypto has observed tops during stretches of extreme greed.

Some investors think that because of this, it’s best to buy during extreme fear, while extreme greed is ideal for selling.

“Contrarian investing” follows this approach. Warren Buffet’s famous quote sums it up: “Be fearful when others are greedy, and greedy when others are fearful.”

Now, here is a chart that shows the trend in the Bitcoin fear and greed index over the past year:

The value of the indicator seems to have been quite low recently | Source: Arcane Research's The Weekly Update - Week 21, 2022

As you can see in the above graph, the Bitcoin fear and greed index has a value of 16 right now, suggesting that the market is extremely fearful.

These low values of the metric have remained for almost a month now, making it the longest stretch of extreme fear since right after the COVID crash back in April 2020.

The report notes that long periods of poor sentiment aren’t extraordinary in the crypto market, but in the past such stretches have usually observed temporary spikes to better sentiment.

In the month of May, there was no such interruption that provided Bitcoin investors with a glimmer of hope.

BTC Price

At the time of writing, Bitcoin’s price floats around $31.4k, up 6% in the last seven days. Over the past month, the crypto has lost 16% in value.

The below chart shows the trend in the price of the coin over the last five days.

Looks like the price of the crypto has observed a push up in the last couple of days | Source: BTCUSD on TradingView

Bitcoin has now maintained strongly above the $31k mark for the first time since the beginning of May. However, at the moment, it’s unclear whether this recovery will last.

Featured image from Unsplash.com, charts from TradingView.com, Arcane Research

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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