Two Months Of Extreme Fear Leaves Crypto In Panic, Bitcoin At $20K

Keshav Verma

1 year ago

3 mins read

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Data shows the crypto market has been observing extreme fear for two months now, leaving investors in panic as Bitcoin has crashed to $20k.

Crypto Fear And Greed Index Is Still Pointing To “Extreme Fear”

As per the latest weekly report from Arcane Research, the cryptocurrency market has now been facing extreme fear for two months now, the longest streak in history.

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

The metric uses a numeric scale that runs from zero to hundred for representing this sentiment. All values greater than fifty imply that investors are greedy at the moment, while those below the threshold signify a fearful market.

Edge values of above 75 and below 25 mean holder sentiments of “extreme greed” and “extreme fear,” respectively.

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

Looks like the value of the indicator has been very low recently | Source: Arcane Research's The Weekly Update - Week 24, 2022

As you can see in the above graph, the crypto fear and greed index has a value of 9 right now, suggesting that the market is extremely fearful.

Such low sentiment values have now persisted for two months now, making this the longest extreme fear run the market has ever seen.

These indicator values have stayed while the entire crypto sector has gone through a crash and a large part of the investors have gone into the red.

Historically, streaks with extreme fear have been when coins like Bitcoin have tended to form bottoms (and similarly, tops have occurred during extreme greed).

Because of this, some analysts believe an extremely fearful market can provide fresh buying opportunities for cryptos.

The trading technique that follows this idea is called “contrarian investing.” This famous quote from Warren Buffet encapsulates the philosophy: “be fearful when others are greedy, and greedy when others are fearful.”

If the historical trend is anything to go by, the current long run of extreme fear may be when Bitcoin and other coins observe bottoms. And if so, now may be when a contrarian investor will believe to be an ideal buying point.

Bitcoin Price

At the time of writing, BTC’s price floats around $20.4k, down 1% in the last seven days. Over the past month, the crypto has lost 30% in value.

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

The value of Bitcoin seems to have dropped down over the past day | Source: BTCUSD on TradingView

Featured image from Thought Catalog on 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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