Market Re-Enters Extreme Fear Territory As Bitcoin Declines To $36k

Keshav Verma

3 years ago

3 mins read

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The crypto fear and greed index shows market is back in the extreme fear territory as Bitcoin has once again declined to $36k.

Market Sentiment Returns To Extreme Fear As Bitcoin Drops To $36k

Recently, as the price of the crypto recovered back above $38k, the market sentiment rose to that of fear. However, today, the price of BTC has again declined, leading to a return to extreme fear sentiment.

The relevant indicator here is the “fear and greed index,” which measures the general sentiment among Bitcoin investors.

The metric uses a numeric scale that goes from zero to hundred to represent the sentiment. Values below fifty mean the market is currently fearful, while values above the threshold signal a sentiment of greed.

The extreme values of more than 75 or below 25 imply that investors are currently facing extreme greed or extreme fear, respectively.

Very high values of the indicator usually occur around tops. On the other hand, very low values may be there during bottom formations.

Because of this, some traders believe that it’s best to sell during extreme greed and to buy during extreme fear. As Warren Buffet put it, “Be fearful when others are greedy, and greedy when others are fearful.”

Now, here is a chart from the latest weekly Arcane Research report that shows how the Bitcoin fear and greed index briefly rose up in value recently:

The trend in the metric over the past year | Source: The Arcane Research Weekly Update - Week 4

As you can see in the above graph, the Bitcoin market has been extremely fearful for a while now as the price has continued to struggle.

However, a few days back the sentiment improved a bit to that of fear as the crypto showed some recovery. On Sunday, the indicator surged to a value of 30, the highest it has been in the year 2022.

At the time the report with the chart came out, the metric still had a value of 26. But now that Bitcoin has dropped below $37k again, the market sentiment has once again shifted into one of extreme fear.

The fear and greed index has a value of 20 right now | Source: Alternative.me

It’s currently unclear when the sentiment may see a real improvement. Back during the May-July 2021 mini-bear period, such extreme fear values continued for a few months before the bottom was in.

BTC Price

At the time of writing, Bitcoin’s price floats around $36.7k, down 0.1% in the past week.

BTC's price has plunged down in 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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