Bitcoin (BTC) last night unexpectedly fell sharply to below $ 29,000, inviting concern among investors.
Based on the Crypto Fear and Greed Index, it seems that investor emotions plummeted back to record levels in early October 2020 when Bitcoin traded around $ 10,500.
On January 22, the Crypto Fear and Greed Index fell to 40, indicating that market sentiment has changed from "Extreme Greed" to "Fear".
For the record, the Crypto Fear and Greed Index is an instrument to measure the two main emotions that influence how many investors are willing to buy a crypto currency.
According to Alternative.me, the level of ‘Extreme Fear’ can be a sign that investors are too worried which signals a good opportunity to buy. In contrast, when investors are too greedy, this indicates a price correction signal.
Before dropping to 40, the Crypto Fear and Greed Index was at 95 on January 6, showing investors were too greedy as Bitcoin hit an all-time high (ATH) of $ 42,000 on Jan. 9.
Since then, BTC has experienced a price correction, leading to a decline of up to $ 28,750 last night.
Guggenheim Chief Investment Officer Scott Minerd predicts the price of Bitcoin will likely continue to drop to $ 20,000 and at the same time still believe BTC will reach $ 400,000, but not this year.
At the time of writing, Bitcoin is trading at $ 31,545, down 10% in 24 hours.
