The Bitcoin Fear and Greed Index which gives an indication of the sentiment of crypto market players towards Bitcoin for the first time shows an indication of ‘extreme fear’ since the end of July.
Recent developments in financial markets, particularly the recent Evergrande debt crisis in China have had an impact on the crypto market. As a result, the price of bitcoin has plummeted drastically to the $ 40,000 level which is the lowest price level since early April. This event became a factor in the change in public sentiment towards the asset.
The Fear and Greed Index confirms this when general public sentiment towards BTC has fallen to a state of ‘extreme fear’. The last time it went down to a low was on July 21 when bitcoin plunged below $ 30,000.
The results of the index range from 0 - extreme fear to 100 - extreme greed/greed and today the index displays at figure 21. This change is usually the result of a fall in the price of crypto. However, various other factors such as volatility, market volume, social media, surveys, trends, and dominance also play an important role.
The Fear and Greed Index measures not only the cryptocurrency community’s behavior toward bitcoin but also toward other digital assets. Ethereum’s situation, for example, is not much different as it enters “fear” territory (27), coinciding with an ETH drop below $ 3,000.
A handful of market players see this as an opportunity to buy because of sticking to the strategy of adding investment when people are scared. It is therefore not surprising that recently Microstrategy and El-Salvador companies increased their BTC holdings.
