The cryptocurrency market has been on a downward trend since last weekend. The value of the world’s most popular cryptocurrency has fallen by over 15%. As may be expected, the general sentiment among the digital currency industry has altered. In fact, some players in the industry have gone as far as to suggest; that the 2020 bullish trend is gone and investors should prepare for the worst-case scenario.
Moreover, in a matter of just three days, the cryptocurrency market has plunged by over 15%, with the market capitalization moving from $264 billion to as low as $223 billion. It is correct to say that the digital space have had better moments than this. A massive $41 billion of cryptocurrencies have been wiped off.
Indeed, the value of Bitcoin, the world’s most popular digital currency, has fallen by over 10% in 24 hours.
Cryptocurrency market sentiment follows the price
As the market regularly plummets, the general sentiment among cryptocurrency industry players follows the progress of the price. According to the crypto monitoring tool, Santimentfeed, the consensus gentium has shifted from positive to increased negativity. After monitoring the keywords in crypto-related dialogues, they draw the inference that the use of “sell,” “selling,” and “sold” has escalated on the major social media platforms. The crypto monitoring resource uses platforms such as Discord, Twitter, Reddit, Professional Traders Chat and Telegram.
Furthermore, the research by Santimentfeed claims that the previous time cryptocurrency discussions reached such a critical level was in November last year. During the time, China insisted that digital currencies were illicit, resulting in BTC losing $1,000 of its value in a matter of hours.
Fear and Greed index suggests acute fear
The fear and greed index indicates the domineering gloom-ridden opinion of extreme fear in the cryptocurrency market. This index calculates and comprehends different types of data such as volume, social media, surveys, BTC dominance, and volatility; to determine the present mood in the market. It indicates the interpretation from 0 which suggests extreme fear to 100 (extreme greed).
In fact, at press time the fear and greed indicator pointed at 16. This is a representation of the current state of increased fear in the cryptocurrency market.
Is this an opportunity?
As a matter of fact, the price action tends to move opposite in the reverse direction as the public sentiment. This happened back in December 2019 as a result of the losses traders make over time. In fact, the ‘whales’ are always conscious of the situation and act duly. It is correct to say, the public opinion is not always a rational indicator of price in the cryptocurrency market.
Billionaire Warren Buffet once said, “When everyone is fearful, be greedy.” Maybe that is how he accumulated his billions. Still, for us in the space, we can see redemption on the horizon because of the decentralized nature of our commodities which cannot be dictated by governments or politics.
Maybe there is greed in getting out of the clutches of organized centralized financial communities, but mostly, it is survival of the fittest. If we continue to believe in a good thing, no matter the hindrances, we will soon be out in the light.