What Happened: The “Crypto Fear and Greed Index” has dropped to 27, indicating that market-wide sentiment has shifted towards “fear.”
The Fear and Greed index is a metric used to determine the current sentiment of the market, combining data into a meter from 0 to 100. Zero points to “extreme fear,” while 100 means “extreme greed.”
The data is drawn from five sources, including volatility, market momentum, social media, dominance, and trends.
“When investors are getting too greedy, that means the market is due for a correction,” stated the analytics provider behind the index, while also adding, “Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.”
Why It Matters: The Fear and Greed index are now at the lowest observed levels since March 2020, when Bitcoin fell over 40% to a low of $5,200.
Seemingly, the past few days have shifted sentiment considerably, seeing as only last week the index was at 74, indicating “greed.”
Despite Bitcoin’s market dominance dropping to 50% at the time of writing and overall market sentiment being fearful, the cryptocurrency has recovered 5.7% in price overnight and was trading above $52,700 at press time.
The upward momentum in price is a positive sign for those with bullish prospects, as it shows that some market participants have finally started “buying the dip.”
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