For a few weeks now, bitcoin sentiment derived from the Crypto Fear and Greed Index (CFGI) has been in the “extreme fear” range. While Bitcoin made some gains on Monday, the CFGI is still in the “extreme fear” position with a ranking score of 16 out of 100. The Crypto Fear and Greed Index remains […]
For a few weeks now, bitcoin sentiment derived from the Crypto Fear and Greed Index (CFGI) has been in the “extreme fear” range. While Bitcoin made some gains on Monday, the CFGI is still in the “extreme fear” position with a ranking score of 16 out of 100.
Crypto Fear and Greed Index Remains at ‘Extreme Fear’
About 45 days ago, the Crypto Fear and Greed Index (CFGI) hit the “extreme fear” range with a score of 22. On that day, April 15, the 24-hour bitcoin price range was between $39,823.77 and $40,709.11 per unit. Since then, the markets fell further and on May 12, the value of BTC hit a low of $25,401, which was lower than the previous low last summer in July. If someone were to buy BTC on May 12, it would be up over 24% against the US dollar today.
Despite gains over the past two weeks, the CFGI is still in the “extreme fear” zone and the rating is even lower than it was on April 15. does not necessarily mean markets will remain gloomy. The CFGI hosted on alternative.me gauges market sentiment and the website notes that there are two simple assumptions:
- extreme fear it may be a sign that investors are overly concerned. That could be a buying opportunity.
- When investors are receiving Very greedythat means the market is due for a correction.
However, extreme fear can also lead to more capitulation and the so-called buying opportunity can be much smaller. Or one could also assume that the current time frame is a ladder buying opportunity and people are happy to buy BTC on the way down. The simple assumptions of the CFGI are just that, as they can be accepted as truths, but they may not end up coming to fruition.
Similarly, if “investors are getting too greedy”, as the CFGI says, it does not necessarily mean that the crypto markets will correct themselves. This means that if someone were to follow that advice, she could be selling BTC at a lower point than she might have expected. On the other hand, there is always the old investment advice that there is nothing wrong with making a profit along the way.
Crypto market sentiment, at least according to the CFGI, has been in the “extreme fear” region for over a month. Yesterday, on May 30, the index reached a ranking score of 10, which means that the latest CFGI score of 16 is an improvement. Google Trends metrics for the query “bitcoin” show that interest has increased since the recent Terra fiasco.
Interestingly, data from Google Trends (GT) around the world indicates that interest in bitcoin was wandering for a while before the fallout from Terra LUNA and UST. But during that specific week (May 8-14), GT data shows that the search term “bitcoin” skyrocketed to the highest GT score (100) since the second week of June 2021. However, the week after the Terra LUNA and UST market carnage, the GT data score for the term “bitcoin” dropped by 45%.
What do you think about the Crypto Fear and Greed Index reaching a score of 16 and remaining in the “extreme fear” zone? Let us know what you think about this topic in the comments section below.