Per the reports, after the abrupt market crash previous week, Crypto Fear & Greed Index has been indicating ‘extreme crypto fear.’
The Fear & Greed Index functions as the indicator for the confidence and attitudes of investors towards the crypto market. The system employs various sources, including social media, for producing relative numbers reflecting the sentiments of investors.
For fear and market volatility, a lower number is associated, while the higher number signals that investors are moving towards the greed territory.
Emotions driving crypto fear?
As per the index, the behavior of the crypto market is quite emotional. It is observed that investors get greedy in case the market is rising, and that results in FOMO (Fear of Missing Out). Moreover, individuals also sell their currency as an irrational response to witnessing red numbers.
Since the 8th March, the crypto market is in extreme fear zone. The prevalent pandemic has instigated panic and fear all over the globe. This situation of uncertainty due to the coronavirus has had a negative impact on all the markets, including the crypto market.
The global pandemic has been causing a global economic crisis, and thereby, global price depression can be seen everywhere. After the abrupt market crash on 12th March, the Bitcoin price dropped below $4000, while the index dived down to its all-time-low since August 2019.
The index has been claiming that these extreme sentiments of the market could be a sign of potential price reversal. As extreme fear tends to direct the investors’ worried attitude and might present an opportunity for buying, whilst the indication of greed could be a sign that the crypto market id due for some correction.