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Bitcoin Fear & Greed Index has been in the zone of extreme fear for 72 days. This is the longest stay of the cryptocurrency market in this range in the entire history of observations. What to expect next?
Fear & Greed Index broke the record of continuous stay in the zone of extreme fear. Panic gripped cryptocurrency traders on May 5, when the Bitcoin (BTC) rate fell below $38,000. While the market is trying to form a bottom, the mood among traders remains pessimistic and they do not see an opportunity for themselves to make a successful transaction.
On May 5, bitcoin lost support at $38,000 and headed below the ascending support line. On May 12, it recorded a low of $ 25,228, after which it began consolidation above the next support line. However, the cryptocurrency failed to hold on, which led to an accelerated fall in mid-June. The current low of $17,567 was recorded on June 18. The consolidation that has continued since then again follows an upward support line.
For the first time, a long stay in the zone of extreme fear in the conditions of the absolute bottom of the bear market was observed in 2018-2019. Then the extremely negative sentiment among traders reigned for 32 days in a row. The second time this happened was during COVID-19 and lockdowns in March-April 2020 – the fear and greed index remained below 25 points out of 100 (extreme fear zone) for 50 days.
Observer Philip Swift, also known by his nickname PositiveCrypto, believes that such a long stay in the zone of fear – more than 70 days – may indicate an imminent reversal of the market trend. But not everyone agrees with him, pointing to a number of common negative factors: rising inflation and key rates from central banks, armed confrontation in Europe, the threat of recession. All this creates conditions unfavorable for cryptocurrency and other high-risk assets.
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