Current Stretch Of Bitcoin Fear Surpasses 2021 Selloff

Keshav Verma

3 years ago

3 mins read

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Data shows the current stretch of Bitcoin fear has surpassed that during the 2021 selloff as market continues to be extremely fearful.

Bitcoin Fear And Greed Index Shows Market Sentiment Is Again Extremely Fearful This Week

As per the latest weekly report from Arcane Research, sentiment among BTC investors has once again been that of extreme fear this week.

The “fear and greed index” is an indicator that tells us about the general sentiment currently among Bitcoin holders.

The metric uses a numeric scale that goes from one to hundred for representing this sentiment. All values above fifty signal “greed” in the market, while index values below the cutoff imply holders are fearful right now.

Extreme values of above 75 and below 25 indicate market sentiments of extreme greed and extreme fear, respectively.

Historically, Bitcoin tops have usually formed while investors are extremely greedy. Similarly, bottom formations have taken place during periods of extreme fear.

Because of this, some investors think buying during extreme greed is the best, while extreme fear is ideal for selling.

This investment philosophy is called “contrarian trading.” 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:

The indicator's value seems to be around 21 at the moment | Source: Arcane Research's The Weekly Update - Week 10, 2022

As you can see in the above graph, the Bitcoin fear and greed index has been in fear (usually extreme fear) territory since November 2021 now, with the exception of a couple spikes to neutral values (around 50) that lasted very brief.

This stretch of fear is now longer than the one following the selloff last year between May 2021 and July 2021. Currently, the metric has a value of 21, indicating the market is extremely fearful.

Last week as well the general investor sentiment was that of extreme fear. If contrarian investing is anything to go by, periods like now may be a good time to buy more Bitcoin.

The macro uncertainties looming over the market like the Russian invasion of Ukraine may be fueling the current fear sentiment. Right now, it’s hard to say when greed may return among BTC investors.

BTC Price

At the time of writing, Bitcoin’s price floats around $40.4k, down 4% in the last seven days. The below chart shows the trend in the price of BTC over the last five days.

BTC's price looks to have surged up over the past 24 hours | 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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