Bitcoin Sentiment Reaches Local High, But Can’t Shake Recent Fear

Keshav Verma

3 years ago

3 mins read

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Last week, Bitcoin sentiment shifted to greed for the first time in four months, but has since fallen back down into fear territory amid the current geopolitical and macro uncertainties.

Bitcoin Fear And Greed Index Slips Down From Four Month High

As per the latest weekly report from Arcane Research, the crypto market sentiment has once again sunk down to fear after briefly entering greed last week.

The “fear and greed index” is an indicator that tells us about the general investor sentiment in the Bitcoin and wider crypto market.

The metric uses a numeric scale that goes from zero to hundred for representing this sentiment. All values above the “fifty” mark mean that investors are currently greedy.

On the other hand, values below this cutoff imply that the market is fearful at the moment. Extreme values of above 75 and below 25 belong to the “extreme greed” and “extreme fear” territories, respectively.

Some investors think that buying while the market is extremely fearful is the best as bottoms often tend to happen during such periods.

Similarly, selling during extreme greed may be a viable strategy due to historical top formations in such periods. This philosophy is often called “contrarian investing.” This quote from Warren Buffet sums it up the best:

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:

Looks like the value of the indicator is at 46 right now | Source: The Arcane Research Weekly Update - Week 6

As you can see in the above graph, over a week ago, the metric observed some sharp uptrend as it crossed the 50 mark for the first time in four months.

However, since then, the value of the index has declined, and now the Bitcoin market sentiment is once again that of fear.

The report suggests that this trend may be because of broader financial markets derisking in response to current geopolitical and macro uncertainties.

Also, according to some other data, the Bitcoin leverage ratio has sharply dropped over the past week, further suggesting that investors are reassessing their risk.

BTC Price

At the time of writing, Bitcoin’s price floats around $44.2k, up 1% in the last seven days. Over the past month, the crypto has gained 3% in value.

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

BTC's price has surged up over the past couple of days | Source: BTCUSD on TradingView

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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